Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

WELSH SHIPPING AGENCY BILL [Lords] (By Order)

Consideration, as amended, deferred till Tuesday next at Seven o'clock.

CLYDE NAVIGATION ORDER CONFIRMATION BILL

Considered; to be read the Third time Tomorrow.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

Zambia (European Officials)

Mr. Wingfield Digby: asked the Minister of Overseas Development what plans she has for providing alternative employment for European officials who will shortly be redundant in Zambia.

The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram): Such officers are welcome to register with the Overseas Services Resettlement Bureau, which can help them to obtain employment in Britain, and those who wish may be considered by my Ministry for further employment overseas.

Mr. Digby: Is the Minister aware that since this Question was put down there have been Press reports that a well-known civil servant has been dismissed, that this will increase the feeling of uncertainty and that the Answer which he has just given will not allay it very much?

Mr. Oram: I do not think that the general facilities are affected by the unfortunate case to which the hon. Gentleman refers.

Overseas Aid Scheme

Mr. Stratton Mills: asked the Minister of Overseas Development whether she will extend the Overseas Aid Scheme to local authorities and other para-government bodies overseas; and if she will estimate the additional cost involved.

Mr. Oram: My right hon. Friend is examining the case for such an extension but is not yet able to make a statement. If the scheme were so extended the additional cost would depend on the numbers of British officers employed by the bodies concerned and I would hesitate to give an estimate until the matter has been further studied.

Mr. Stratton Mills: While welcoming that reply, which I count as semi-helpful, may I ask the hon. Gentleman whether he is aware that many of the central government functions in many countries are carried out by the local authorities and by public bodies? Is he also aware of the very real difficulty which arises in having British staff working upon O.A.S. and technical assistance terms in the same country?

Mr. Oram: I am aware of these points and they are among the considerations that will be borne in mind when the review takes place.

Sir G. Nicholson: Is the Minister aware, for instance, of the situation which arises in connection with the national parks in Tanganyika? I understand that the Department has considered itself inhibited from granting aid because they are not directly under the administration of the Tanganyikan Government, but that, nevertheless, other foreign Governments have granted a lot of aid. Surely it seems wrong that the British Government should remain inhibited from helping this exceedingly worthy cause.

Mr. Oram: The particular question of national parks is a difficult one in that under the 1951 Act an extension was not possible without an Amendment to cover such employees. This is a point which is being taken into consideration.

Mr. R. Carr: Can the Minister say when he expects his consideration to be completed and when he will be able to make an announcement?

Mr. Oram: I cannot give a date at the moment, but it will be proceeded with quite rapidly.

Ghana (Civil Service Pensions)

Mr. Ridley: asked the Minister of Overseas Development what steps she has taken to get the Income Tax deducted in Ghana from the pensions of former civil servants refunded.

Mr. Oram: I have been assured that over-payments of Ghana Income Tax by Ghana pensioners resident in the United Kingdom will be refunded when the pensions are paid at the end of December.

Mr. Ridley: I am grateful to the hon. Gentleman for his reply, but may I ask him whether he is aware that some of this Income Tax goes back over three years and that I have constituents who have been waiting a very long time? Will the hon. Gentleman redouble his efforts to make the Ghana authorities pay back this money which is owing to British citizens?

Mr. Oram: I am not sure that any redoubling of effort is needed, since the matter looks like being cleared up in a week or so. Since the agreement was only reached in February and suspension of deductions of Income Tax was made immediately in the subsequent three months, that rectified the position to a large extent. The detailed calculations have had to be made since, and I do not think that the hon. Gentleman can rightly suggest that there has been any undue delay.

Former Overseas Officers (Pensions)

Mr. Ridley: asked the Minister of Overseas Development if it is Her Majesty's Government's policy to accept responsibility for the payment of overseas pensions.

The Minister of Overseas Development (Mrs. Barbara Castle): No, Sir. The Government will continue to look to overseas Governments to pay the pensions of their former officers and will continue also to safeguard the position of the pensioners.

Mr. Ridley: But is the right hon. Lady aware that the Chancellor of the Duchy of Lancaster wrote to the Secretary of the Overseas Pensioners' Association and said quite frankly that the

Government's mind was made up in favour of this proposal? Is this another election pledge which the Government propose to break?

Mrs. Castle: There has been no pledge given by this Government. We know that these overseas officers were offered and accepted posts under overseas Governments. Therefore, the obligation to pay the pension should rest with those Governments.

Mr. Ridley: Why did the Labour Party say before the election that it intended to agree with this proposal? Surely this is a broken pledge.

Mrs. Castle: The Labour Party has not made such a pledge.

Mr. R. Carr: Is it or is it not a fact that the Chancellor of the Duchy of Lancaster wrote in the terms suggested?

Mrs. Castle: That is not a question for me.

Mr. Ridley: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

Aid

Mr. R. Carr: asked the Minister of Overseas Development (1) what is the annual target for Government aid to developing countries as a proportion of national income;
(2) whether she is proposing to allocate a large proportion of British aid expenditure to technical assistance.

Mr. Tilney: asked the Minister of Overseas Development whether she is proposing to make any change in the proportion of British aid which is tied to expenditure in this country.

Sir R. Russell: asked the Minister of Overseas Development what changes she is proposing to make in the proportions of British aid expenditure devoted to bilateral and multilateral programmes.

Mrs. Castle: With permission, Mr. Speaker, I will answer this Question and Nos. 6, 8 and 14 together. I do so because these Questions, taken together, call for conclusions on major aspects of our aid policy.
We consider that a thorough review is needed in these matters. Hon. Members


will realise. I hope, that this review, which I am undertaking as a matter of urgency, will necessarily take time. We have to bring the necessary economic analysis to bear on the concrete problems which confront us in this field, to consider what policies are practicable in our present economic situation, and to discuss our proposals with other countries with which we collaborate. I shall certainly make our proposals known to the House as soon as I can. For the present, however, I would prefer not to comment on particular aspects of a policy which we shall need time to define in detail.

Mr. Carr: While not complaining that this matter should be looked at fundamentally in the way that the right hon. Lady suggests, may I ask her whether she can give us some idea of how soon she will be able to give these replies, bearing in mind that she was pretty definite about some of these things in the House not many months ago?

Mrs. Castle: I am sure that the right hon. Gentleman will appreciate that my Ministry has been in existence for only a few weeks. Although he is quite right to anticipate that the Government will take urgent action on all matters of public importance, we cannot do it as quickly as that when the staff has not even been built up. Moreover, the United Nations Conference on Trade and Development at Geneva last spring called for a review of the policies by the donor countries. This is now being carried out in the Development Advisory Committee of O.E.C.D. Some months must elapse before even the interim reports can be produced for the consideration of the Ministerial Council.

Mr. Tilney: Since giving aid to the Colonies has so far been untied, although it is always hoped that the Colonies will buy British, can the right hon. Lady say what percentage of aid is tied at present and whether, in consulting other donor countries, she will endeavour to get all aid untied?

Mrs. Castle: Rather more than one-third of our bilateral capital aid is formally tied. I agree with the hon. Gentleman that if all countries were to untie their aid this country would probably stand to benefit. But I am sure that he will agree that in the present urgent

economic situation we could not take unilateral action in this field.

Sir R. Russell: Could the right hon. Lady be a little clearer in answer to Question No. 14? Does she favour more bilateral aid or more multilateral aid?

Mrs. Castle: This is clearly a matter which must be considered in the light of the general review. About 12 per cent. of our aid at the moment is multilateral. I cannot add to what I have already said about policy.

Mr. Carr: Could not the right hon. Lady answer a little more definitely my earlier question about how long she anticipates this review will take? It is not true to suggest that these matters have not been considered before. Does she still adhere to the view which she expressed to the House at the end of July that the balance of payments should not be advanced as a reason for there not being an immediate increase in Government aid?

Mrs. Castle: On the time factor, I think that the hon. Gentleman is a little unreasonable in asking why we are not in a position to make this policy statement yet. I repeat that I am still completing the staffing of my Ministry. I also repeat that the Development Advisory Committee has not finished its considerations. It would be quite wrong to try to reach conclusions in isolation from the other donor countries and international agencies involved.

Mr. Longden: asked the Minister of Overseas Development to what extent the balance of payments affects the scale of Government aid to developing countries.

Mrs. Castle: In present circumstances the effect on the balance of payments is a factor which the Government will have particularly in mind when determining the amount and types of aid which can be made available. The extent to which aid is a burden on the balance of payments depends on many factors including the extent to which it is spent in this country, and the extent to which other countries are giving aid simultaneously.

Mr. Longden: Does not the right hon. Lady recall that on, I think, 28th July last she made another speech in this House in which she advanced the theory that the balance of payments was no valid reason


why this country should not increase its aid to 1 per cent. of the national product then and there? Why has she changed her mind since then?

Mrs. Castle: I fully recollect that in my speech from the Opposition Front Bench in February I said that the balance of payments position would be bound to have a crippling effect on aid until we had introduced international monetary reform which removed the shadow from our activities. I have stressed that clearly there is some return to us from aid, and this is a point which we should never overlook. There is a direct return of some of the moneys back to this country and there is also the indirect return in the stimulation of world trade, from which we can only hope to benefit.

Mr. Lubbock: Is the right hon. Lady considering means of giving aid to the developing countries which would directly help British industry? In particular, has she considered the provision of light air-craft, of which production is expanding in this country and for which there is particular need in some of the nations of Africa?

Mrs. Castle: Wherever we see an opportunity of increasing opportunities for British exports without damaging the main purpose of aid—which is to stimulate the development of the receiving countries—we seek those opportunities.

Departmental Staff

Mr. Longbottom: asked the Minister of Overseas Development if she will give an estimate of the number of staff her Department expects to have serving overseas in 1965; and whether these will include specialised project advisers.

Mrs. Castle: About 550 in the direct employment of my Department, including specialised project advisers.

Mr. Longbottom: Does the right hon. Lady consider this number sufficient for the real and gigantic task of co-operation with the developing countries which her Department must carry out? If it is not sufficient, will she, through the Commonwealth Relations Office and the Colonial Office, work in those territories where she cannot be represented?

Mrs. Castle: I am not sure that the hon. Gentleman understood my reply. I

assumed that his Question referred to the staff in the direct employment of my Department. The majority of these would be the expert advisers we supply to overseas Governments under the regional programmes of technical assistance. They also include our Middle East Development Division. Of course, there are other people whom we are helping to place in the employment of overseas Governments. These are not included in my figure. Nor are the representatives in our embassies and high commissions who are to deal with aid matters.

Mr. Chapman: Is my right hon. Friend aware that her hon. Friends are very satisfied with the progress which she is making in building up this Ministry and with the enthusiasm which she is bringing to her job?—[Interruption.]—However, can she say whether the staff she has in mind includes economists to work under her new chief economist in helping remote areas of the world to draw up their development plans?

Mrs. Castle: I thank my hon. Friend for what he has said. I am sure that he will agree with me that the laughter of hon. Members opposite reflects a guilty conscience for their having failed to institute this necessary planning action which we are pressing ahead with at a remarkably rapid rate.

Mr. Longden: asked the Minister of Overseas Development by how much the staff of her Department is expected to exceed that of the Department of Technical Co-operation; and how many of the extra staff will be transferred from other Departments.

Mrs. Castle: Approximately 500, of which some 140 are attributable to preexisting functions. Arrangements have so far been made to transfer 87 staff in respect of these posts.

Zambia (Education and Agriculture)

Mr. Longbottom: asked the Minister of Overseas Development what requests she has recently received from the Government of Zambia for the provision of higher education personnel and agricultural officers on secondment; and to what extent she is able to meet the requirements.

Mr. Oram: I have received no requests in these categories since the independence of Zambia and none is outstanding in relation to staff for higher education. I have outstanding requests for 19 agricultural field officers. Four of these posts are about to be filled and the remainder are under active recruitment.

Mr. Longbottom: I am grateful to the hon. Gentleman for that reply. Will he bear in mind the real need of Zambia to develop its agricultural potential, and will he do all in his power to ensure that his Department is able to satisfy its requirements?

Mr. Oram: I can assure the hon. Gentleman that the needs of agriculture, not only in Zambia but in other territories in Africa, are very urgent and fundamental. The Ministry certainly has what he says very much in mind.

United Nations (Special Fund and Technical Assistance)

Mr. Alison: asked the Minister of Overseas Development what will be the amount of the British contribution next year to the United Nations Special Fund and Expanded Programme for Technical Assistance; and what percentage change this represents on the present British contributions.

Mrs. Castle: I cannot yet give figures, but since, as has already been announced, our contribution will be larger than it was this year, the United Nations authorities need not fear any unfavourable effect on their 1965 programme.

Mr. Alison: In thanking the right hon. Lady for that Answer, may I inquire whether, in the light of the very large number of British nationals—and, I assume from her Answer, an even larger number of British nationals—who are working for the expanded programmes, she thinks that there might be an informal link or tie-up between the pre-investment exploration work which they do and subsequent development by specifically British industrial undertakings, so that altruism can be wedded to national self-interest?

Mrs. Castle: I am aware of the point that the hon. Member has raised. It is a consideration which we are bearing in mind.

Embassies and High Commissions (Staff)

Mr. Goodhart: asked the Minister of Overseas Development what steps she is proposing to take to strengthen British representation in the developing countries concerned with aid; and whether such strengthening will take place within embassies and high commissions, or whether her Department will set up its own offices overseas.

Mrs. Castle: My Department is reviewing, in consultation with the Overseas Departments, the provision of staff at our embassies and high commissions to deal with development matters. This would include the secondment of specialist officers from my Department in appropriate cases.

Mr. Goodhart: Is the right hon. Lady aware that a number of appointments in both the technical assistance and teaching fields have been delayed because the representatives of developing countries over here have no authority to act without referring everything back to their Governments at home and that efficiency would be improved if our representation in these countries could be improved?

Mrs. Castle: Certainly, we are anxious to extend our representation in these embassies and high commissions and we are also considering seconding specialist officers from my Department to work in these embassies and high commissions to establish closer and more effective relationships with the receiving countries and also to be able more effectively to supervise the management of aid.

Mr. R. Carr: Can the right hon. Lady confirm that the strengthening decided on as a result of the first quick review undertaken of all needs by the last Administration either has been or definitely will be carried out?

Mrs. Castle: Yes. We already have an estimate of new requirements and we are taking rapid steps to put those estimates into operation.

World Development Authority

Mr. Dudley Smith: asked the Minister of Overseas Development what initiative she is taking towards the establishment of a World Development Authority.

Mrs. Castle: None yet, Sir.

Mr. Smith: Does not the Minister remember her fiery and crusading speech in the House in February, when she envisaged a world authority giving much increased aid and subsidised by a world income tax? As she then said that this would be given priority if the Labour Party came to power, should not the right hon. Lady now be giving a lead to the United Nations? [Interruption.]

Mrs. Castle: I certainly remember that speech. It was an excellent speech. I am glad that the hon. Member has studied it with special care and, apparently, approves its contents. The establishment of a World Development Authority is, of course, a very long-term initiative and it is one that would have to be considered in the light of the recent United Nations Conference on Trade and Development, which has been a new development since I made that speech. In the meantime, however, the very establishment of this Ministry, which enables us both to plan more effectively our own internal aid and to establish more effective relationships with other donor countries and with United Nations agencies in this field, is a most useful step in this direction.

International Labour Organisation

Mr. Stratton Mills: asked the Minister of Overseas Development what formal relationship exists between her Department and the International Labour Organisation; and what is the extent of this relationship.

Mrs. Castle: Formal relations between Her Majesty's Government and the International Labour Organisation are the responsibility of my colleague the Minister of Labour with whose officers my Ministry works closely on I.L.O. matters relating to aid and development as part of my responsibility for co-ordinating British policy in this field.

Mr. Mills: Does the Minister recall that in her statement on 10th November, referring to the Specialised Agencies, she did not refer to the work in co-ordination with this United Nations specialised department? Will she give an assurance that she will pay particular regard to its valuable management training courses?

Mrs. Castle: In my statement of 10th November, I pointed out that I had general responsibility for coordinating British policy in respect of the aid and development work of the United Nations and its Specialised Agencies. I also pointed out that I would be taking over the executive responsibility for our relations with F.A.O. and U.N.E.S.C.O. These are Specialised Agencies which have a particular activity in this field. That is why I have taken over executive responsibility for them, but not for the I.L.O., which is concerned with many industrial matters which are more the interest of my right hon. Friend the Minister of Labour.

Commonwealth Development Corporation

Mr. John Harvey: asked the Minister of Overseas Development whether she proposes to make any changes in the functions and resources of the Commonwealth Development Corporation.

Mrs. Castle: Responsibility for the Corporation is in process of being transferred to my Department. When this transfer is completed I shall review these matters with the Commonwealth Development Corporation in the light of the needs of the British aid programme as a whole.

Mr. Harvey: Will the right hon. Lady, in her review, bear in mind that the Commonwealth Development Corporation, by helping developing countries to lay some foundations for their own industries, plays a vital part indeed in the aid that we can give? Will the right hon. Lady therefore see that its work is stimulated to the greatest possible extent?

Mrs. Castle: I entirely agree with the hon. Gentleman that the C.D.C. is doing admirable and valuable work, and the purpose of the review will certainly be to strengthen its hand.

Sir C. Osborne: May I ask the right hon. Lady to be careful not to promise more overseas aid than this country can and is willing to afford?

Mr. Tilney: Will the right hon. Lady, in her review, consider allowing the C.D.C. to operate in the sub-continent of India?

Mrs. Castle: I would rather not add to the Answer that I have just given.

British Council (Educational Aid)

Mr. Dudley Smith: asked the Minister of Overseas Development what changes she is proposing to make in the rôle of the British Council in providing educational aid.

Mrs. Castle: The Department of Technical Co-operation and the British Council kept in close and continuous touch regarding the educational assistance rendered by them to developing countries, and these arrangements are being continued by my Department. In consultation with my right hon. Friends the Foreign Secretary and the Commonwealth Secretary I shall be considering whether any improvements can be made, and in the event of this I will make a fuller statement in due course.

Mr. Dudley Smith: I thank the right hon. Lady for that reply, but would not she agree that there is a danger of overlapping and duplication in this field as between the British Council and her new Ministry? Will she do what she can to avoid overlapping in trying to recruit new teachers?

Mrs. Castle: We have arrangements for the co-ordination of educational assistance under technical co-operation arrangements and through the British Council. We shall continue to strengthen that co-ordination.

Sir G. de Freitas: In the consultations which my right hon. Friend will be having with the Commonwealth Secretary and the Foreign Secretary, will she impress on them the importance of their ambassadors and high commissioners not appearing in any way to do the job of the British Council representatives whose work is made easier when they are seen to be independent of direct agencies of the British Government?

Mrs. Castle: I think that the implications of that question are for my right hon. Friend the Foreign Secretary.

Mr. Longden: Does the right hon. Lady expect to be able to get more funds for the British Council for this work?

Mrs. Castle: I think that that must await my further statement.

Africa (Technical Staff)

Mr. Geoffrey Lloyd: asked the Minister of Overseas Development what steps she is taking to increase the number of technical staff supplied to former British dependencies in Africa.

Mr. Oram: The annual rate of appointment of qualified staff has more than doubled for Commonwealth Africa since 1962. I have begun a thorough review of recruitment policy generally to see what more can be done to improve our performance still further.

Mr. Lloyd: Will the right hon. Lady, whose enthusiasm for her task we all appreciate, bear in mind that this is one of the most valuable forms of aid, but that one of the great difficulties is to ensure, on their return, the seniority of experts, particularly doctors and teachers, who go out from this country for a temporary term of service overseas?

Mr. Oram: My right hon. Friend will have heard the right hon. Gentleman's remarks. She was nodding, which indicates that she understood the point made by him. These points will be taken into account in the review that is to be made.

Dame Irene Ward: Is the hon. Gentleman aware that agreement by nodding is not the same as agreement by voice?

Agricultural Surpluses

Mr. Crawley: asked the Minister of Overseas Development what proposals she has to revive the concept of a world food board for the disposal of agricultural surpluses.

Mrs. Castle: The co-existence of actual and potential agricultural surpluses in developed countries with the hunger and poverty in many parts of the world clearly presents a challenge and an opportunity.
It is the intention of the Government to examine all approaches to this problem, including the concept of a world food board, in order to ensure that any surplus distribution is directed to promoting the economic development of the recipient countries.

Mr. Crawley: Is the right hon. Lady aware that disposal of these surpluses is already being carried out by the United Nations through the World Food Programme, and being carried out in a way


which is helping indigenous agriculture in developing countries? Is it not better to support the United Nations in its programme than to set up some new body?

Mrs. Castle: We are examining these problems in the context of the World Food Programme, which is to be reviewed during 1965. I think that the Question referred to wider purposes than the World Food Programme, and we feel that it is right, in collaboration with my right hon. Friend the Minister of Agriculture, to consider these wider purposes.

Mr. Prior: Is the right hon. Lady aware that her original reply will cause disappointment to many of her right hon. and hon. Friends, because have they not for years been pushing out this idea of a world food plan, and has not she contradicted it this afternoon, or at any rate delayed it for many months, and why?

Mrs. Castle: I cannot accept the hon. Gentleman's statements. We fully support the aims and purposes underlying the concept of a world food board as originated by Lord Boyd Orr in 1946, but it is simply a question of finding the best means of securing those objects in present circumstances.

Mr. Soames: Will the right hon. Lady say what is the difference, as she sees it, between the duties and responsibilities of the World Food Programme, which is in existence at the moment, and the world

£ million


—
1961
1962
1963


Total Bilateral economic Aid (gross)
155·4
143·1
138·9


Total Multilateral Aid
6·5
7·2
18·9


Total Private Investment for Developing Countries
92
68
[70–90]



253·9
218·3
[227·8–247·8]


[ ] estimated

Private Investment Overseas

Mr. J. H. Osborn: asked the Minister of Overseas Development what proposals she has for encouraging private investment overseas.

Mrs. Castle: I am aware that private investment has a useful rôle to play in development and I am examining ways in which that rôle can most effectively be discharged.

food board which is a figment of her imagination?

Mrs. Castle: I think it would be agreed that the world food board has more ambitious aims, which I am discussing with my right hon. Friend the Minister of Agriculture.

Overseas Assistance

Mr. J. H. Osborn: asked the Minister of Overseas Development whether she will state the total assistance provided to all the less developed countries, from Great Britain, during the last three years in the form of bilateral grants and loans, contributions to international organisations and multilateral aid, and private capital, respectively; and which of these specific forms of overseas assistance she proposes to expand.

Mrs. Castle: With permission, I will circulate the information in the OFFICIAL REPORT. With regard to the second part of the hon. Member's Question, I am at present considering the future shape of our aid programme.

Mr. Osborn: Does the right hon. Lady think that the balance of payments situation will affect this consideration?

Mrs. Castle: It will certainly be one of the many factors which we shall consider.

Following is the information:

Mr. Osborn: While welcoming the right hon. Lady's reply, may I ask whether she is aware that the measures recently introduced by the Chancellor of the Exchequer have positively discouraged private investment overseas? Is she aware of the measures which Germany has taken with regard to countries such as India to encourage German manufacturers to invest overseas? What is the right hon. Lady's


attitude to insurance against political risks attaching to investments overseas?

Mrs. Castle: I am not aware of the fact to which the hon. Gentleman referred in the first part of his supplementary question. With regard to the last part of it, I would point out that the question of guarantees for private investment overseas has been under examination for some time by various international bodies, but proposals of this kind raise problems which concern the Treasury, the Board of Trade, and other Departments as well as my own.

Mr. Paget: Considering the balance of payments situation which we inherited, is it not unfortunately necessary to limit overseas investment?

Mr. R. Carr: Will the right hon. Lady at least give an undertaking that we will play a full and active part in the work of O.E.C.D. in helping the conditions for private investment, including the idea of a multilateral insurance scheme against political risks?

Mrs. Castle: I give the right hon. Gentleman the assurance that we will give careful consideration to that.

Sixth Form Students (Employment Overseas)

Mr. Molloy: asked the Minister of Overseas Development what means exist, or are envisaged, for informing sixth formers in secondary modern, grammar, and comprehensive schools of the opportunities that exist in pursuing a career in overseas territories which are within her purview; and if she will make a statement.

Mr. Oram: The most effective means, in my opinion, is in the sixth form conferences for groups of schools on Commonwealth affairs organised so admirably by the Commonwealth Institute. Officers of my Department are frequently invited to take part in these conferences and do so. My Ministry is of course also associated with the scheme for volunteers run by Voluntary Service Overseas which has close contacts with schools.

Mr. Stratton Mills: Will the hon. Gentleman consider using Mr. Nicholas Kaldor as a lecturer in the schools?

Mr. Oram: Mr. Kaldor is fully occupied helping to clear up the economic mess left by the Conservative Government.

Mr. R. Carr: Is the hon. Gentleman aware that in spite of the so-called economic mess to which he refers, aid was doubled by the last Government in six years? Will he set a similar target?

Mr. Oram: It is certainly true that aid was increased, but it is also true that we are going to do far better.

Nigeria (Teachers)

Mr. Dalyell: asked the Minister of Overseas Development what measures Her Majesty's Government propose to take to increase the supply of British teachers to Nigeria and to encourage the continued service of those already there.

Mrs. Castle: I am glad to announce that arrangements have been agreed with the Nigerian Federal Government for the retention of British teachers in Nigeria and the recruitment of new ones.
We shall now seek to recruit in consultation with the Nigerian authorities up to 75 British graduate or technical teachers a year for service in Nigeria. To facilitate recruitment we shall offer a special financial inducement payable in Britain. We shall also be prepared to offer a financial inducement to certain British graduate or technical teachers already serving in Nigeria who are prepared to stay on for at least three years and whose services the Nigerian authorities wish to retain.
This scheme, estimated to cost £1 million over five years, represents a partnership not only between the British and Nigerian Governments but also between the Ministry of Overseas Development and a major education authority in Britain. The London County Council is——

Mr. Cooper: On a point of order. Is it not customary, Mr. Speaker, for Government statements to be made after Question Time?

Mr. Speaker: It is always a matter of judgment whether it is better to do it then or in the middle of Questions. The point is that we should try to keep both


supplementary questions and answers as short as is consistent with what has to be done.

Mrs. Castle: I am interested to note that hon. Members opposite, having pressed me for statements of policy, are obviously very annoyed when I am able to announce an advance in this field.
The London County Council is forming an educational link with Northern Nigeria and will now encourage their own teachers to go out to Northern Nigeria on secondment under the new scheme. This is a most welcome development, and my Ministry is ready to assist other education authorities to enter into similar links elsewhere overseas.

Mr. Dalyell: Will my right hon. Friend pay special attention to links with Western Nigeria?

Mrs. Castle: Yes. This will be included.

Leprosy

Sir W. Bromley-Davenport: asked the Minister of Overseas Development, whether she is aware that medical practitioners and others concerned with the treatment of leprosy are proscribing the use of the word "leper" in view of the fact that the odium associated with this word has done much to prevent the cooperation of communities concerned and hence the eradication of the disease; and whether she will give an assurance that this consideration is borne in mind by the staff of her Department in their dealings with medical aid.

Mr. Oram: I am aware that it has been suggested from time to time that lepers should be known by another name. As ray right hon. Friend the Secretary of State for the Colonies has already pointed out, changes in the English words are not likely to have much significance among those communities where the disease is commonest. I believe that my Department's efforts should be devoted to helping to stamp out the disease rather than to trying to cloak it under another name.

Sir W. Bromley-Davenport: Is the—[Interruption.] Is the Minister—[Interruption. ] Is the Minister aware—[Interruption.] On a point of order, Mr. Speaker——

Mr. Speaker: There is no point of order, but the noise is delaying progress and must be less.

Sir W. Bromley-Davenport: Is the Minister aware of the great distress that has been caused among the unfortunate sufferers of this disease by the moronic observations of the Prime Minister, and is not this typical of—[Interruption.] the Socialist Party?

Mr. Oram: I have watched the hon. and gallant Gentleman over a period of six weeks attempt to tackle—[HON. MEMBERS: "Answer."]—I am answering. I have watched him attempt to tackle three separate Ministers in order to make the point that he has now made. I had a lingering hope that he had a serious point to make in connection with this pathetic disease, but since he seeks merely to make a party political point, I would say to him that he appears to put too literal an interpretation on the remarks of my right hon. Friend. I have heard the hon. and gallant Member himself described in colourful terms which perhaps ought not to be taken too literally.

Oral Answers to Questions — SOUTH VIETNAM

Mr. A. Boyle: asked the Prime Minister what is the policy of Her Majesty's Government with regard to support to any action that the United States of America may take in the Far East with the aim of bringing the South Vietnamese war to an early conclusion; and what assurances have been given by Her Majesty's Government to the United States Administration.

The Prime Minister (Mr. Harold Wilson): It is the desire of Her Majesty's Government, as it is that of the Government of the United States, that the fighting in South Vietnam be brought to an end as quickly as possible. This can be done as soon as the 1954 Geneva Agreements are fully respected and infiltration ceases. No new assurances have been given to the United States Government on questions affecting Vietnam.

Mr. Royle: Does the Prime Minister intend that his Government should give full support to the United States Administration in any steps that they may take to bring this unfortunate war to a close? In view of the excellent work of the


Thompson Mission in South Vietnam, will he give an assurance to the House that he will strengthen this Mission, and perhaps increase its numbers?

The Prime Minister: I think that the whole House recognises the great contribution made by the Thompson Mission and the great knowledge of this kind of activity that Mr. Thompson has brought from previous experience in Malaya. Certainly we are prepared to maintain and, if necessary, strengthen the Mission. As the House may know, some facilities have also been provided for training the South Vietnamese in jungle warfare in Malaysia.

Mr. Warbey: Can my right hon. Friend say whether he was able to obtain from President Johnson an assurance that the American Government are now prepared to accept the terms and the final declarations of the 1954 Geneva Conference?

The Prime Minister: The American President is as keen as I am, and as the hon. Member is, to bring this fighting to an end as quickly as possible and to get an honourable settlement which will guarantee the integrity of the area of South Vietnam.

Sir F. Bennett: In view of the reports current throughout the United States of America that no assurance has been given by him about continuing support by Her Majesty's Government for the American position in South Vietnam, is the right hon. Gentleman prepared to give an assurance on the matter?

The Prime Minister: I do not quite know what the hon. Gentleman is talking about, or what reports he is referring to.

Sir F. Bennett: Did the right hon. Gentleman give an assurance or not?

The Prime Minister: If the hon. Gentleman is asking whether I have given an assurance about providing any military support in Vietnam—which was the subject of many of these reports—I have made it clear that no assurances have been given. As for the attitude of Her Majesty's Government to American support for bringing peace in South Vietnam, we have always expressed our support for that, and we recognise that they understand the problem that we have in Malaysia.

Oral Answers to Questions — PRIME MINISTER AND PRESIDENT JOHNSON (TALKS)

Mr. Wall: asked the Prime Minister if he will make a statement about his talks with President Johnson.

Mr. Owen: asked the Prime Minister if he will make a statement on his recent talks with the Prime Minister of Canada.

Mr. Bence: asked the Prime Minister if he will make a statement on his talks with President Johnson about British Guiana.

Brigadier Clarke: asked the Prime Minister what subjects he discussed with the President of the United States; and if he will make a statement.

Mr. Biggs-Davison: asked the Prime Minister whether he will give an assurance that no decision was made at Washington which would prevent the deployment outside Europe of British nuclear forces.

Mr. Dempsey: asked the Prime Minister if he will make a statement on his recent talks with President Johnson, in connection with future summit meetings between the East and the West, with a view to removing tension.

The Prime Minister: I will arrange to circulate in the OFFICIAL REPORT the Joint Agreed Communiqué published after my talks in Washington on 7th and 8th December with President Johnson.
If I catch your eye, Mr. Speaker, I hope to make a full statement in the course of the debate we are to have tomorrow and Thursday.

Mr. Wall: Will the Prime Minister today answer two specific questions [HON. MEMBERS: "No."]—whether or not agreement was reached to give up sovereignty over the British nuclear deterrent and whether or not agreement was reached for British participation in an allied surface force armed with nuclear weapons?

The Prime Minister: I hope that the hon. Gentleman will await the very full statement that I hope to make tomorrow.

Sir Alec Douglas-Home: Is the Prime Minister aware that it would have been


a great convenience to the House if he had been able to circulate to the House, or make, a statement about his talks in Washington so that we could have had it—[HON. MEMBERS: "Did you?"]—in our hands before the debate? That would have helped us a great deal. As the Foreign Secretary has apparently circulated some document to the N.A.T.O. Council, may I ask why it was not circulated to Parliament?

The Prime Minister: The right hon Gentleman was, I think, Foreign Secretary at the time of the Nassau Conference. He was at the Conference. He will perhaps recall that the then Prime Minister answering Questions on 22nd January, 1963, said that he could not make any statement on those talks on the ground that there was to be a debate, riot one day later, but eight days later.

Sir Alec Douglas-Home: We must await the detailed statement which no doubt the Prime Minister will make in the debate. May I ask how it is that a circular, apparently containing the proposals which he made to President Johnson, has been circulated already to N.A.T.O. but we have seen no sign of it?

The Prime Minister: The right hon. Gentleman knows perfectly well that when he has been engaged in international negotiations he has put forward a lot of suggestions on behalf of his Government before he made any statement in this House. I can tell him that, unlike the practice which he followed, I intend tomorrow to make a much fuller statement to the House than has been made to any of our colleagues in N.A.T.O.

Following is the Communiqué:

Oral Answers to Questions — THE WHITE HOUSE

Text of Joint Communique by President Lyndon B. Johnson and the Right Honourable Harold Wilson, Prime Minister of the United Kingdom, following talks in Washington, D.C. on December 7 and 8, 1964.

The President of the United States and the Prime Minister of the United Kingdom met in Washington 7th December to 9th December. They were assisted by Secretary of State Rusk, Secretary of Defense McNamara and Under Secretary of State Ball and by the Foreign Secretary, Mr. Gordon Walker and the Secretary of State for Defence, Mr. Healey.

In the course of a wide ranging exchange of views, the President and the Prime Minister reviewed the current international situation in light of the responsibilities which their countries carry for maintaining, together with their allies and friends, peace and stability throughout the

world. They reaffirmed their determination to support the peace-keeping operations of the United Nations and to do all in their power to strengthen the systems of regional alliance in Europe, the Middle East and the Far East to which they both contribute.

They recognized the importance of strengthening the unity of the Atlantic Alliance in its strategic nuclear defense. They discussed existing proposals for this purpose and an outline of some new proposals presented by the British Government. They agreed that the objective in this field is to cooperate in finding the arrangements which best meet the legitimate interests of all members of the Alliance, while maintaining existing safeguards on the use of nuclear weapons, and preventing their further proliferation. A number of elements of this problem were considered during this initial exchange of views as a preliminary to further discussions among interested members of the Alliance.

They also agreed on the urgency of a worldwide effort to promote the non-dissemination and non-acquisition of nuclear weapons, and of continuing Western initiatives towards arms control and disarmament. They recognized the increasing need for initiatives of this kind in light of the recent detonation of a Chinese nuclear device.

The President and the Prime Minister reaffirmed their determination to continue to contribute to the maintenance of peace and stability in the Middle East and the Far East. In this connection they recognized the particular importance of the military effort which both their countries are making in support of legitimate Governments in South East Asia, particularly in Malaysia and South Vietnam, which seek to maintain their independence and to resist subversion.

They recognized also that a nation's defense policy must be based on a sound economy. The President and the Prime Minister, while determined that their countries should continue to play their full parts in the world-wide peace-keeping effort, affirmed their conviction that the burden of defense should be shared more equitably among the countries of the free world.

They agreed also on the need for improvement in the balance of payments and in the productivity and competitive position of both their economies in order to ensure the underlying economic strength which is essential for fulfilling their heavy international responsibilities. In this connection they arranged to explore in detail the possibilities of closer cooperation between their two countries in defense research and development and in weapons production.

The President and the Prime Minister reaffirmed their belief in the importance of close allied cooperation in international affairs. They agreed that this meeting was only the first stage in their consultation in which the matters that they had discussed would need to be examined in greater detail. They looked forward, too, to continuing discussions at all levels both within the Alliance and in wider international negotiations in pursuit of nuclear and conventional disarmament and all measures to reduce world tension.

Oral Answers to Questions — HONOURS

Mr. William Hamilton: asked the Prime Minister if he will introduce legislation to abolish the system of honours.

The Prime Minister: No, Sir.

Mr. Hamilton: Did I hear my right hon. Friend aright? Is he aware that millions of people in the country regard the present system with the cynical hilarity that it so thoroughly deserves? Does not he regard the post-election Honours Lists as the Establishment equivalent to the E.T.U. "ballot rigging" exercise—the lists from both sides of this House—and will not he consider, if not legislation, setting up a committee consisting of my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot) and South Ayrshire (Mr. Emrys Hughes) and myself to examine this question objectively?

The Prime Minister: I am not quite sure about the millions referred to by my hon. Friend, who has obviously acquainted himself with their contempt for the honours system, but I know from my postbag that there are many millions more who have a very lively interest in it.

Mr. Selwyn Lloyd: However that may be, may I ask the Prime Minister when he intends to have struck a new, meaningful, purposive Dunkirk medal?

Oral Answers to Questions — QUESTIONS TO MINISTERS

Sir Knox Cunningham: asked the Prime Minister whether he will introduce legislation to enable Ministers not in either House of Parliament to be in a position to answer Questions asked by hon. Members about the work of their Departments.

The Prime Minister: No, Sir.

Sir Knox Cunningham: Will the right hon. Gentleman tell the House when we may expect to have an opportunity to ask Questions of Mr. Frank Cousins? Would not the right hon. Gentleman like to have Mr. Cousins here in the House to hold his hand when trouble arises, and can he say, will it be this year, or next year, or some time—or never?

The Prime Minister: I think that I can just about manage to cope with the hon. and learned Gentleman without anybody holding my hand. It is not for me to speculate on the result of democratic elections, but I should certainly point out to the hon. and learned Gentleman that there are abundant and honoured precedents for having Ministers in distinguished positions who are not able to answer Questions in either House. We have not, however, on this occasion taken the unusual step of stopping Parliament sitting until a Prime Minister and a Minister of Science were able to join us.

Oral Answers to Questions — FEED THE MINDS CAMPAIGN

Mr. Baker: asked the Prime Minister if Her Majesty's Government will make a contribution to the Feed the Minds Campaign; and if he will make a statement.

The Prime Minister: No, Sir. The object of the campaign which we welcome is to raise funds to supply books and other reading material with a Christian background to people in developing countries. We are glad to co-operate with the Christian churches in many enterprises, but we already have extensive schemes to help to meet the educational needs of the developing countries.

Mr. Baker: Would not the right hon. Gentleman agree that the best possible means of countering Communist propaganda would be to increase the dissemination of Holy Writ? Would not he reconsider his statement?

The Prime Minister: I think this cause a very worthy one and some of us were concerned in the ceremony to launch its activities. I think that the hon. Gentleman is devaluing Holy Writ if he thinks that its only purpose is to counteract political propaganda.

Mr. Driberg: Is my right hon. Friend aware that, contrary to what the hon. Member for Banff (Mr. Baker) says, the New Testament, the major prophetic books of the Old Testament, and particularly the Acts of the Apostles, are full of the most dangerous and subversive Communist propaganda?

Oral Answers to Questions — CHINA (UNITED NATIONS REPRESENTATION)

Mr. William Hamilton: asked the Prime Minister what instructions have been sent to the United Kingdom representative at the United Nations in regard to the question of recognition of the Communist Chinese Government.

Mr. Kitson: asked the Prime Minister what instructions he has now issued to Her Majesty's Government's representative at the United Nations regarding the admission of Communist China as a member.

The Prime Minister: Our representative at the General Assembly has been instructed to vote in favour of the usual motion for the representative of the People's Republic of China to take the seat occupied by the Nationalist representative.

Mr. Hamilton: Can my right hon. Friend say whether in his discussions with President Johnson representations were made to that Government as to its position in the United Nations on this matter?

The Prime Minister: I do not think that it would be particularly helpful to go into all the details of the talks on every subject raised. The United States Government is quite clear about the position of Her Majesty's Government, and indeed the attitude of the previous Government, on this Question.

Mr. Longden: I welcome the reply of the right hon. Gentleman. Will he please make clear that no condition can be made by Communist China before entering the United Nations that her sovereignty over Formosa must be recognised?

The Prime Minister: I do not think that that is likely to be the issue raised in the particular vote that we shall be asked to take.

Oral Answers to Questions — NORTH ATLANTIC TREATY ORGANISATION

Mr. James Hamilton: asked the Prime Minister whether, with a view to strengthening the North Atlantic Treaty Organisation, he will invite the political

heads of all member States to an early conference in London.

The Prime Minister: I have no present plans of this kind.

Mr. Hamilton: Is my right hon. Friend aware that I am sorry he cannot give me an assurance that he will invite the heads of the various States to a conference in London, and that I feel that this act by a new Prime Minister would go a long way towards achieving world peace?

Oral Answers to Questions — SOUTH-EAST ASIA

Mr. Ridsdale: asked the Prime Minister if he will take steps with a view to initiating a conference of interested countries to discuss a peaceful settlement of the troubles in South-East Asia.

The Prime Minister: The troubles in South-East Asia are serious, but they have different origins and involve different groups of countries. At present, I see little chance of finding a generally acceptable basis for a single conference to discuss them all. If this situation were to change, however, Her Majesty's Government would certainly be prepared to consider a conference or conferences as a possible means of promoting peace and stability in the area.

Mr. Ridsdale: As there seems little prospect at the present moment of a peaceful settlement, would not the right hon. Gentleman assure the House that he will do all he can to get the backing of other friendly Asian Powers to aid Malaysia in its struggle against Indonesia? Has he considered carrying out discussions with Japan?

The Prime Minister: We are certainly doing all we can to get support for the defence of Malaysia's integrity against infiltration and aggression. I have myself taken certain action in that direction, particularly within the Commonwealth. So far as other Asian countries are concerned my right hon. Friend the Foreign Secretary is, of course, trying to get a more lively understanding not only in Japan but throughout the Afro-Asian countries of the position of Malaysia and her rights in this matter.

Mr. R. A. Butler: Is the Prime Minister aware that the Foreign Secretary is


a co-Chairman in this matter, and would there be any question of reassembling the Geneva Conference?

The Prime Minister: My right hon. Friend is very well aware of his responsibilities as co-Chairman and if we felt at any time that there would be an advantage in calling together the 14-nation Conference we should not hesitate to do so. In so far as the problems of Cambodia, Laos or Vietnam are concerned, the right hon. Gentleman will be aware that there have been direct bilateral talks between the United States and Cambodia in which some progress has been made. With regard to Vietnam and Laos, what I said in answer to a previous Question will, I am sure, be acceptable to the right hon. Gentleman.

Sir C. Osborne: Since there can be no real peace in South-East Asia unless there is the full co-operation of Communist China, would the Prime Minister use his influence in Peking to see whether we can get co-operation from that quarter?

The Prime Minister: The hon. Gentleman will know that my right hon. Friend the President of the Board of Trade visited China recently—I think the first visit by a member of the Cabinet to Communist China—following arrangements made for a right hon. Gentleman opposite to go. My right hon. Friend naturally brought to the attention of the top leaders in China our very strong feelings—and, I am sure, the feelings in all parts of this House—about the action that China could take to help bring peace in South-East Asia.

WALES (FLOODING)

Sir K. Joseph (by Private Notice): asked the Secretary of State for Wales whether he will now make a statement on the flooding in Wales, and on the action being taken.

The Minister of State for Wales (Mr. Goronwy Roberts): I have been asked to reply.
Following heavy rains on Saturday, 12th December, many rivers in Wales overflowed their banks and caused extensive flooding, especially in Mid- and North Wales.
As soon as he heard about this, by right hon. Friend the Secretary of State went

to Wales, and, in the course of yesterday, covered by helicopter the Wye, the Severn, the Dee and the Conway valleys. He also landed at Newtown, Montgomeryshire, and saw some of the damage on the spot.
Local authorities and various voluntary organisations brought their emergency services into operation, and I should like to pay warm tribute to all who rendered help in this emergency.
My right hon. Friend was also most impressed with the cheerful spirit of the people who were struggling so valiantly to make good the damage to their homes.
The floods are gradually receding, but until they subside further it will be impossible to form a realistic estimate of the damage to public and private property, and to say how much of the damage is covered by insurance.
Requests from the respective authorities for financial help to relieve distress, will receive prompt and sympathetic consideration, and I have been asked to say that my right hon. Friend the Minister of Housing and Local Government associates himself with this statement.
My right hon. Friend will make a further announcement as soon as he has heard from these authorities. In the meantime, every effort is being made to restore public services, and the situation is rapidly returning to normal.
Any local authority which needs advice or assistance has only to telephone the Welsh Office in Cardiff and everything possible will be done to help.
I hope to visit some of these areas myself later this week to learn at first hand what remains to be done.

Sir K. Joseph: My right hon. Friends and hon. Friends and I would like to be associated with the expressions of sympathy with those who have been distressed by the floods, and appreciation of the civil and Service authorities, who are doing all they can. We welcome the willingness of the Minister to make a further statement as soon as possible.

Mr. Roberts: I am sure that my right hon. Friend and these unfortunate but brave people of Wales will very much appreciate the right hon. Gentleman's expression of sympathy.

Mr. Gibson-Watt: In associating myself with what my right hon. Friend has said, I should like to ask two questions. Did the river boards concerned give adequate warning to those who were to be flooded? Under the last Administration there were certain arrangements, particularly with the Ministry of Agriculture but also with the Ministry of Housing and Local Government, about losses. Will loss of livestock—dead stock—and other forms of property be considered by the Government on this occasion?

Mr. Roberts: I am glad to say that despite the extensive nature of this flooding the loss of livestock appears to be very small. It seems that farmers have learned from previous unfortunate experience to move their stock to higher ground as a result of warnings by the river boards and other agencies which, I gather, have been effective in most areas.
As to whether losses of livestock will be considered—which was, I think, the gravamen of the hon. Member's inquiry—I have said that all requests from the respective authorities will be promptly and sympathetically considered. I understand that the farming community, after their experience three or four years ago, have been able to make rather more comprehensive insurance arrangements with the appropriate houses during the last three years or so.

Sir J. Langford-Holt: Is the Minister aware that this problem is by no means limited to Wales alone, but applies over the border, especially in the Severn Valley? Can he assure the House that help given in 1960 to local authorities, mostly by the Services, for example, in providing facilities for drying out houses which were flooded, without any cost to the local authorities, will again be provided on this occasion?

Mr. Roberts: I am sure that I can give that assurance. Where any local authority is deficient in the equipment that the hon. Member mentions it can apply to the Welsh Office for assistance from other authorities which have this equipment. In any case, any request for aid or assistance of any sort will be very

promptly and very sympathetically considered.

Sir J. Langford-Holt: Has the application to be made to the Welsh Office by counties that are not in Wales?

Mr. Roberts: I am responsible for the Welsh Office only, so far, but I can assure the hon. Gentleman that these problems span any boundary. The misery, worry and terrible loss that happens to people caught in this kind of disaster must be considered jointly by the Ministers concerned with the areas affected, and there will be very close co-operation with my right hon. Friend the Minister of Housing and Local Government. I should imagine that a question by the hon. Gentleman to the Minister of Housing and Local Government would get a fuller answer than I have been able to give him.

Mr. Peter Thomas: In thanking the Minister of State for his statement, may I ask him whether he has any information that he can give now about the extent of the damage in the Conway Valley?

Mr. Roberts: The extent of flooding in the Conway Valley, which the right hon. Gentleman and I know so well, has been quite considerable. The extent of the damage, however, this time appears to be far less than we at first feared. I gather that the loss of livestock is minimal, but I shall be visiting the Valley on Friday or Saturday and will meet the representative of farmers and local authorities in order to make a fuller assessment of the extent of the damage.

BILL PRESENTED

TEACHING COUNCIL (SCOTLAND)

Mr. Roberts: Bill to provide for the establishment in Scotland of a Teaching Council; to provide for the registration of teachers, for regulating their professional training and for cancelling registration in cases of misconduct; and for purposes connected with the matters aforesaid, presented by Mr. Ross; supported by Mr. George Willis, Mrs. Judith Hart, and Mr. Niall MacDermot; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 51.]

LOCAL GOVERNMENT (SCOTLAND) ACT, 1947 (AMENDMENT)

3.38 p.m.

Mr. William Hamilton: I beg to move,
That leave be given to bring in a Bill to repeal section 330 of the Local Government (Scotland) Act 1947.
I am asking the House to allow me to introduce a simple little one-Clause Bill to delete Section 330 of the 1947 Act. It might be for the convenience of the House if I explained that that was a consolidation Measure running into 275 pages—the result of agreement by a Joint Committee of both Houses of Parliament. The Conservative Members on that Committee apparently objected to the abolition of what is now contained in Section 330.
My hon. Friend the Member for Edinburgh, East (Mr. Willis)—now the Minister of State for Scotland—attempted to delete that Section in a similar procedure on 6th March, 1963. Hon. Members then present will recall the eloquent, persuasive and powerful speech he then made, unfortunately to no avail—the hordes of backwoodsmen who then sat on this side of the Chamber were much too strong for him to breach the principle. But times have changed and my hopes are correspondingly higher than were my hon. Friend's 18 months ago.
That Section of the 1947 Act allows certain unelected persons to sit on the councils of Aberdeen, Dundee, Edinburgh, Perth and Glasgow, but not on other burgh councils. In Aberdeen, Perth and Dundee it is someone called "the Dean of Guild" who enjoys the privilege. In Edinburgh and Glasgow, there are two such individuals, the Dean of Guild and the Deacon Convenor of Trades. I am sorry that this is foreign language to my English hon. Friends. This is nothing more than a hang-over, a legacy from the murky history of the control of our cities by the vested interests of the day, the ancient equivalents of the present Tory Party.
Prior to the 1833 Municipal Corporations Act the towns were run first by the guildery and later by the guildery and the incorporated trades. The guildery apparently represented the traders and the sellers and the incorporated trades repre-

sented the craftsmen of the day. They were not craftsmen as we understand them today. I should call them grafts-men, crafty men who did no work. They saw to it that others did the work. Again, they were the ancient version of the modern Tory Party.
Lord Cockburn, in his memoirs of the day, used vivid languge to describe their nefarious activities. He thundered about their corruption, their irresponsibility, their iniquity, their impenetrability—all expressions used by my hon. Friend in March, 1963. The degenerate rule of these unsavoury characters brought the cities, especially Edinburgh, to the verge of bankruptcy. Not until this century has Edinburgh rid itself of the debts left by those scoundrels. Yet, when the 1823 Act was passed introducing the first elements of democratic control into our municipalities, this poisonous undemocratic appendage was allowed to continue, albeit in a modified form, and so it has existed for 130 years.
Today the incorporated trades are closed corporations. Entrance fees are quite substantial. I remember well the former Member for Edinburgh, Central, Mr. Andrew Gilzean, speaking on the Committee stage of the Bill, in 1947, pointing out that the entrance fee for the cordwainers was about £1,600. Mr. Carmichael, the former Member for Glasgow, Bridgeton, mentioned the corporations of the bonnet makers and dyers. To get into these one did not have to know how to make a bonnet or to dye cloth; anyone could join if he could pay the fees. These bodies represent no one but themselves. Yet they have the right to select from among their members persons to sit on our city councils, with all the rights of councillors elected by democratic processes.
As long ago as 1835 a Royal Commission on "The Existing State of the Municipal Corporations in Scotland" said, and I quote direct from its Report:
In the recent Act of Parliament relative to the election of burgh councils, a certain anomaly has been adopted in reference to a few burghs, the expediency of which we feel ourselves compelled to question.
In each of the burghs of Edinburgh, Glasgow, Dundee and Perth, the Dean of Guild, elected by the guild brethen and, in each of the two former burghs, the Deacon Convenor elected by the convenery, is, by that Act, declared to be, in virtue of these elections, a constituent member of council.


The Report goes on:
We have been unable to discover any reason why these particular corporations should be endowed with that extraordinary privilege … We recommend …that the seats ex-officio should be taken away, and that these councillors should be replaced by election.
One-hundred-and-thirty years have gone by since then, yet we claim to be in process of modernising Britain. My considered opinion is that 130 years, even for this country, is just about long enough to delay the implementation of a Royal Commission's recommendation. The timing of my proposed Bill is particularly apposite. Rightly or wrongly—I think rightly—party politics have been increasingly intensified in our local government affairs. In cities like Edinburgh, Glasgow, Aberdeen and Perth, party political fortunes ebb and flow. Fairly recent evidence, which, again, was quoted by my hon. Friend the Member for Edinburgh, East last March, showed how these unelected individuals can be wed by the Conservatives for blatant party motives. It may not be British but it makes sense to them.
In Edinburgh today, in particular, the political balance could hardly be finer. In such circumstances as these it is indefensible that the future government of that great city should depend on the political views of two unelected, non-representative members of the council. When my hon. Friend was seeking to introduce his Bill in March, 1963, the hon. Member for Glasgow, Hillhead (Mr. Galbraith)—I do not see him in his place—opposed the Bill on several grounds.
First, the hon. Member said that it was not opportune. It never is in circumstances such as these. He argued that it was not the only undemocratic element in our society, and quoted the House of Lords. I am prepared to bring in another Ten Minutes Rule Bill to deal with that if that is the argument now. He also said that this was only a small problem, as there were only two councillors out of 113 concerned in Glasgow. On the same basis, how would we feel in this House if there were 12 unelected Members here at this particular time? 
My Bill will, I hope, be acceptable to every Member. We are all declared democrats in this House. There can be no defence for the further continuation of

the existence of these unelected members in our great cities in Scotland.

Question put and agreed to.

Bill ordered to be brought in by Mr. William Hamilton, Mr. McInnes, Mr. Hugh D. Brown, Mr. Buchanan, Mr. Carmichael, Mr. Doig, Mr. Hector Hughes, Mr. Small, Mr. Hannan, Mrs. Cullen, and Mr. Gregor Mackenzie.

LOCAL GOVERNMENT (SCOTLAND) ACT 1947 (AMENDMENT)

Bill to repeal section 330 of the Local Government (Scotland) Act 1947; presented accordingly, and read the First time; to be read a Second time upon Friday 22nd January and to be printed. [Bill 52.]

LOCAL AUTHORITIES, ENGLAND AND WALES (GENERAL GRANT)

3.49 p.m.

The Minister of Housing and Local Government (Mr. Richard Crossman): I beg to move,
That the General Grant Order 1964, dated 8th December, 1964, a copy of which was laid before this House on 10th December, be approved.
It may be convenient to the House, Mr. Speaker, if, with this Motion, we also discuss the next Motion on the Order Paper:
That the General Grant (Increase) Order 1964, dated 4th December, 1964, a copy of which was laid before this House on 9th December, be approved.

Mr. Speaker: Certainly, if the House so pleases.

Mr. Crossman: Under the system which we inherited from the previous Government the general grant is the main vehicle of Exchequer assistance to local authorities. When it was first introduced, in 1958, we opposed it from the Opposition benches, and we are still determined either to change it drastically or replace it with something better. And yet today I am seeking the approval of the House for a General Grant Order which fixes the total to be paid not only for 1965–66, but also—which is a great deal worse—for 1966–67. It is, in fact, two whole years of general grant—and it is two whole years of the life of this Labour Government—which I am asking the House to approve this afternoon.
The reason why I am doing so is


simple and obvious. It is, of course, the General Election and its timing. It was not our fault that the election was postponed month after month, so that this Government was only formed in the middle of October, just when the local authorities and the Departments were about to meet, in order to reach agreement on the figures on which the general grant for 1966–68 would be based. Directly I arrived at the Ministry, I was told by my officials, "Minister, you really must start dealing with the general grant if we are to get it approved in time for the local authorities. Otherwise, they will not know where they are when they make their budgets in January".
Of course, this was true. Yet before we had taken our bearings and summed up the situation it was impossible either for me or for my colleagues in the Education and Health and other Departments to approve the figures prepared on the basis of the policies of the previous Administration. We had to re-examine the estimates. It was a rush, but the job was done, and though the local authorities were given very little time to digest our criticisms of their estimates, and even less time for discussion than they are accustomed to, I think that we can be satisfied that, despite the change of Government, and the rush, this Order has been carefully discussed and duly laid before the Christmas Recess.
I am aware that many of my hon. Friends are shocked at the mere prospect of continuing the present system of general grant for two more years. Let me give them a word of encouragement. They should not deduce from the fact that I am laying this Order today that there will necessarily be no change made before 1967–68. But it is not difficult to calculate that, however hard we work it will be quite impossible to make the comprehensive reorganisation of local government finance before the local authorities start budgetting for 1966–67, a year from next January.
As I said before, the General Grant Order must cover at least two whole years, so I now turn to deal with the method by which we have arrived at the aggregate of these years' general

grants. I strongly suspect that the niceties of this calculation will be much more familiar to many hon. Members present than they were to me eight weeks ago. But in case there are one or two hon. Members whose knowledge is imperfect, I would remind the House of the following facts. The procedure starts with the preparation by the local authorities in the summer of detailed estimates for the next two financial years. This is the system imposed in 1958. The main estimates concern education, 83 per cent. of the total—that is the total expenditure taken into account for the general grant—local health, 8 per cent., fire services about 3 per cent., welfare accommodation, 3 per cent. and child care, 2 per cent. In addition, there are a number of minor services which make up 1 per cent. and include, I am told, registration of electors and school crossing patrols. These are the services taken into account.
In the preparation of these estimates, the local authorities have been helped, and we have been helped for the first time this year, by the fact that the tables summarising expenditure of the local authorities could be assembled, on a computer—we march with the times— not belonging to my Ministry, alas, but to the Cheshire County Council. These figures were then subjected to critical examination, but owing to the shortness of time for negotiations, in some cases, full agreement was not reached with the associations and the estimates presented with this Order are the product of the Departments' examinations as modified in subsequent negotiation, but not agreed with the local authorities.
I now turn from the Estimates to the grant itself. Here let me make one thing clear: the estimates are made in detail, service by service, for education, health, etc. But the grant is not assigned, which makes it the more difficult, to any particular service or services. It is paid as a block grant, and because it is a block grant a special, complicated and almost unintelligible method has been worked out to distribute it among the local authorities according to what is claimed to be the size of the job they have to do. The factors and the weighting which determine the amount which each local authority gets are listed in pages 7 and


8 of the Report. The most important of them is population. Others are the proportion of school children and old persons, the density of population and the proportion of children under 5.
As the representative of a county borough in the rapidly expanding West Midlands, I shall not, of course, pretend for one moment that either the weighting or the factors are fair. I gather that some expanding authorities, such as Hertfordshire, have made their protest on this point. All I can say is that this will all certainly be taken into account in the examination which we are now conducting into the whole subject of local government finance.
But quite apart from the special problems of the expanding areas, there has been for some time a general feeling of unease on both sides of the House about the growing burden of the rates. Local expenditure has been increasing al the rate of 7 per cent. or 8 per cent. per annum, almost all of it on essential services which very few hon. Members here would deny need rapid expansion. If the proportion of Exchequer assistance is kept constant, as it has been in recent years under Tory administration, this means that the unfortunate ratepayers have to find at least £80 million more each year out of rates. The average rateable value increases by 2 per cent. or 3 per cent. annually and so provides about one-third of the extra cash. The rest has to be found by increasing the ratepayers' bill by 5 per cent. or 6 per cent. a year.
So the fact is that unless the system is changed, or unless the balance is decidedly shifted within the system in favour of the ratepayer, rates must continue to rise quite automatically. That is how things work as a result of the previous Tory Administration, a steady process of moving the burden on to the ratepayer—a deliberate process, a process facilitated by the exquisite complications of the general grant. It was always easier to move things on to people when the method by which they were moved——

Mr. Speaker: I have to remind the Minister, otherwise we shall get out of hand, that we cannot discuss the merits of the principle of general grant upon

this Order. I have allowed the right hon. Gentleman to express his dislike of it. That must be sufficient.

Mr. Crossman: I am grateful for that permission, Mr. Speaker. I will not make any further references except to say that, if I am explaining how the general grant works, it is difficult to restrain my feelings upon the subject. What I am now doing is to explain how we have worked it out this time.
We made it quite clear in our election manifesto that we are not content with the system or with the balance within it and we have promised to transfer a larger burden of the public expenditure from the local authorities to the Exchequer. This is a pledge we are determined to keep, both in its general form and in application to teachers' salaries.
As to the system which we are now working, and which I am now explaining, I assure the House that a radical re-examination is under way.

Mr. A. E. Cooper: The Minister has made a very important point, as it were "off the cuff". He referred to "a pledge we are determined to keep", especially with regard to teachers' salaries. We are entitled to know exactly what he means by that.

Mr. Crossman: Mr. Speaker would rule it out of order. I am already on the edge or margin of discretion. I had better stop it there. We are to have a radical examination of the system, but it will take time to work out practical proposals, discuss them with representatives of local government, and give them legislative form. In the meantime, we have to operate the general grant, and that is why these Orders are before the House today.

Mr. Mark Woodnutt: The right hon. Gentleman has blamed the previous Government for the fact that under the general grant system the proportion of the burden falling on local ratepayers has remained the same. He goes on to say that the present Government are now reviewing the system. The General Grant Order is for two years. The Government are keeping the proportion the same at 55·1 per cent. for the two years. Could they not merely increase the percentage?

Mr. Crossman: This is a very important point, which had dawned on me, too. I am now coming to the method we have had of assessing the general grant. If the hon. Gentleman will contain himself, I shall be dealing with this problem.
I turn now to the Orders themselves, and I think that it will be for the convenience of the House if I deal first with the so-called Increase Order. In local government terms I gather that this is what we would call a supplementary estimate, which covers increases of costs which have taken place since the last Increase Order was made at the end of 1963. Since costs have risen during this period by nearly £11 million, the grant payable in 1964–65 is increased by £6 million, bringing the total to £625 million.
Hon. Members will observe that rather more than £3 million of this increased expenditure is for interest rates and of this £3 million a little under £1½ million represents the increased burden it is estimated local authorities will have to carry up to the end of next March as a result of the increase in the Bank Rate last month. The Order also makes allowance for the increased duty on petrol and other fuel.
I now turn to the main Order, the General Grant Order, 1964, covering 1965–66 and 1966–67. The estimated expenditure for the two years amounts to £1,246·45 million for 1965–66 and £1,338·56 million for 1966–67. The corresponding grant figures are £680 million and £731 million.
I do not propose to go through the Order or the Report in any detail, because I know that hon. Members want to speak and make comments on them. But there are three points to which I should like to draw the attention of the House. The first point concerns expenditure on the provision of accommodation for the aged and infirm—what is generally known as welfare expenditure. For some years the local authorities have been urging that this welfare expenditure should be brought into the general grant estimates alongside education, health and the other services. When I met the local authority representatives, they laid great emphasis on this point. I had regretfully to point out in reply that a concession on this point would have increased the total grant by about £18 million.
In view of the abolition of the prescription charges and the improved pension rates, which both bear heavily on the Exchequer, nobody could accuse the Chancellor of the Exchequer of failing to recognise the needs of the aged and the sick. But it was thought that the Exchequer could not make this further concession at this time. Instead of conceding £18 million, therefore, we have brought the welfare services into the General Grant, but maintained the aggregate total more or less unchanged by using a percentage of 55·1 instead of 56·5.
I shall not pretend that the local authorities expressed any pleasure at this device, but I am sure that they did realise the economic facts which forced the Government to make what seemed to them a harsh decision to keep the grant level for this year.
That brings me to my second point.

Mr. John M. Temple: Before the right hon. Gentleman continues, would be confirm that formerly there was an element of specific grant within the figure for the aged and infirm and that, in fact, that element of specific grant has not now been carried forward into the general grant negotiations?

Mr. Crossman: I think that I am right in saying that that has all been left outside the calculation.
I come now to the item of £20 million which no doubt hon. Members have noticed is here for the first time and which we have included in the estimates for the second year of the grant period without allocating it to any particular services. This is an unprecedented addition and requires explanation, which I am pleased to offer. When I met the local authority representatives they accepted under protest the cut back of their estimates imposed by Whitehall for the first year. Having done so, they proceeded to point out that there were powerful reasons for treating them more generously in the second year.
Indeed, by analysis of the five years since the general grant was introduced they were able to demonstrate that in each grant period so far the out-turn of the second year had been less favourable to the local authorities than the out-turn of the first year, to the tune, indeed, of about 2 per cent. or £20 million on each occasion. This tendency for expenditure


to out-run estimates in the second year should surprise no one. After all, it is difficult enough to make realistic estimates 12 months ahead. If one tries to extend one's predicting to 24 months ahead, the likelihood of error obviously increases.
In addition to faulty estimating, there is also the likelihood of developments in each social service, not as a result of new legislation or new policies, but owing to developments inherent in the natural growth of the service. If one is estimating education costs one year ahead, accuracy is difficult enough. Two years ahead it is almost impossible to foresee, for example, how far teacher training will have expanded, quite apart from the total of teachers' salaries. That was the local authorities' case for saying that they should be treated more generously in the second year than in the first or, to put it another way, that their estimates should not be cut back as harshly in the second year as we had cut them back in the first.
Whatever is the cause of this underestimating for the second year the Government accept it as a fact. That is why we have included, for the first time, in the estimate for our second year a special additional sum calculated to cover any under-estimating and to provide a very small margin for further development of the services. This addition of £20 million will mean an addition of £11 million to the general grant in 1966–67, increasing it from £720 million to £731 million.
I want to emphasise once again that by making this very small additional provision for the second year we have not excluded the possibility of a major change in the division of financial burden between central and local government before 1967–68. Indeed, I would prefer the House to accept this £20 million as merely a token of the Government's determination to halt the process of transferring more and more of the burden from the taxpayer to the ratepayer which has been proceeding under successive Conservative Governments for 10 years.
The third and last point to which I want to call attention is one on which I feel a great deal of sympathy, but I am sorry that I cannot do anything about it. When they saw me, the representatives of the London boroughs and the Greater London Council demonstrated to their

satisfaction—or, if you like, dissatisfaction—and to mine, that they are likely to suffer as a result of the heavy increase in administrative costs from the staff duplications rendered necessary by the reorganisation of London government.
One of the few great achievements of this great Tory reform, the Greater London Act, has been to demonstrate, once again, the working of Parkinson's Law: the proliferation of new, powerful authorities inevitably generates a multiplication of staffs and a swelling salary bill. I congratulate the Tories on their great success. Unfortunately, the London boroughs and Greater London have to pay the bill. They came to me and asked, "Why should we pay the bill? Could not you pay some of it through the general grant?" Much though my prejudices were engaged, my objective judgment got the better of me. I expressed my sympathy with the Londoners; I did not deny that the amount included on this account in the total estimate is inadequate, nor did I attempt to pretend that when it was shared out among all the recipient authorities it would not make much difference to the London boroughs.
But I had to tell them that there was a paramount reason why they could not be helped over their difficulty out of the general grant. Under this grant, the sum which each authority receives is determined not, as in the case of a percentage, by reference to its own expenditures, but by a complex calculation in terms of population, numbers of school children and similar factors. The special metropolitan weighting, moreover, is limited by the terms of the Act to taking account of higher levels of costs and pay.
There is one other reason why I had to ask the boroughs and the Greater London Council to contain themselves in patience. My Tory predecessors in the Ministry have been ready to discuss suggestions with the local authorities for changing the weighting and the factors which determine the distribution of the general grant. This year, however, even before the election, it had been decided that, with the whole question of local government finance under examination, this was not a time for unnecessary changes. The arrival of a new Government, pledged to redress the balance in favour of the ratepayer by a radical reexamination of local government finance,


adds strength to this argument. The system of general grant, unsatisfactory as it is, has had to be left unchanged for another two years. All I can tell the London boroughs is that I am sorry that they are suffering as they are under it.
I conclude as I started. Inheriting the general grant, which we opposed when it was introduced and which we still approach with the gravest suspicion, we have been forced at very short notice to administer it as fairly, or as little unfairly, as possible. In particular, we have tried to meet the urgent request of the local authorities that it should not bear too unjustly on them in its second year of operation. In this limited objective I think that I can claim that we have achieved a future for the ratepayers for the next two years slightly less harsh than their representatives expected a few weeks ago.

4.14 p.m.

Mr. F. V. Corfield: The right hon. Gentleman the Minister of Housing and Local Government made great play, when he opened the debate, with the difficulties in which he has been placed by finding that the General Election coincided with the period of the year when the local authorities customarily make their estimates. He went on to tell us that he now, for the first time, had a computer. He did not convince me that this was a good reason why we should be considering this Order today, only five days after it was laid before the House.
We do not want in any way to obstruct its discussion, but I am sure that the House will agree—as, indeed, the Parliamentary Secretary himself said last year, when we discussed this matter with the position reversed—that this is the only opportunity which the House gets annually to make a comprehensive examination of the whole grant system in relation to local authorities. The length of time to study these rather complex issues is not a matter purely of inconvenience to the Opposition—we do not particularly object to that—let alone any matter of purely party political significance. I am sure, however, that the House, almost universally, agrees that this is an immensely important matter.
Local authorities today have responsibility not only for the expenditure of

vast sums of money, but also for the administration of immensely important services, which are in many ways services which, as far as the private individual is concerned, have rather a more intimate effect than many of the services directly or indirectly administered by Government Departments. So I hope the right hon. Gentleman will realise that, as a result of this rather rushed process, it has not been possible to study these matters as adequately as we had hoped.
The Parliamentary Secretary last year was at great pains to rub in the difficulties which the Opposition had—with his slide rule checked by the long division of himself and his right hon. Friend the present Secretary of State for Education and Science, while the Minister with his computer, had a vast array of support behind him. I make no objection in that respect, now that the positions are reversed. It is a little hard that the hon. Gentleman the Parliamentary Secretary should so soon have forgotten his worries about his slide rule and the checking of his long division.
However, turning now to the Order itself, the right hon. Gentleman has been quite frank with us by saying that as a result of this rush—or failure or otherwise of the computer—the local authority associations have not been given very much time and they feel that they have not had enough time; and that as a result of that, though perhaps it might have materialised in time anyway, there was not full agreement. I am the last person to suggest that the local authority associations should have any form of veto on the House. Nevertheless, I hope that when the hon. Gentleman winds the debate up, he will be able to tell us whether—as I think it is almost inevitable that we shall have to face an Increase Order in the year ahead; we have had one on every occasion up to date—the Act permits of putting right any of the weightings which might have appeared to be more appropriate this time had the negotiations gone on a little longer.
Turning to the substance of the Order, I shall as far as possible endeavour to avoid becoming over-engrossed in the fascinating, if somewhat obscure, arithmetical problems. I had some sympathy with the right hon. Gentleman when he referred to the complexities and to his ignorance—he did not say that it


was complete ignorance, but nearly so—of about eight weeks ago. This is a subject which I find that I can hold with some confidence for half an hour or so but with decreasing confidence as time goes on. My hon. Friend the Member for the City of Chester (Mr. Temple), who will be winding up the debate for the Opposition, has always shown a fascination for these matters which greatly exceeds my own and I have no doubt that he will be able to deal with anything under that head.
Nevertheless, there are one or two points on which I think it might help the House if he could have some more explanation than we have so far been given. The first question I want to put to the Parliamentary Secretary is a question in relation to the rate product deduction which is mentioned on page 8 of the Report at a figure of 2d. Perhaps he could confirm my recollection of this matter, which is that that represents the same figure as in the last General Grant Order which, in turn, represented a reduction, after making allowance for the effects of revaluation an effective deduction, of½d.
It was certainly the intention—according to my recollection with the full agreement of the local authority associations, that this rate product deduction ought gradually to be eliminated altogether from the general grant system. As far as I recollect, it was a hang-over, so to speak, of the original specific educational grant, and it had been agreed that the sensible thing was gradually to eliminate it, in view of the fact that it became more and more anomalous with the passage of time. I hope that the Parliamentary Secretary will be able to confirm my recollection, which I hope is right, and tell us, at the same time, why there has been a change with regard to this rather minor matter of policy and what is the reaction of the local authority associations to that change.
The second point which I should like to raise is that in the last debate we had there was some discussion as to the effect, or likely effect as it was then, on local authority expenditure arising from the provisions of the Children and Young Persons Act, which was a Bill before another place when we were having our discussions. May I be told what effect the provisions of that Act have had on the

expenditure of local authorities and whether it has been taken into account? The main reason I ask this is that I notice that there is a specific reference to the equivalent Scottish Act in the Report accompanying the Scottish Order. It would help us if we were told why there is no corresponding reference in the Report on the English Order.
Thirdly, there was some criticism in the last debate, largely underlined by the Parliamentary Secretary, about the planning grant. As far as I remember, when I replied to the debate I said that we were somewhat short of experience in the working of the planning grant. I should, therefore, be grateful to be told what the further two years' experience has shown and what conclusions the Government have reached about this factor. I observe that it has gone up quite substantially in cost for the two years which are under consideration, but in view of the enormous cost, which we all know, which arises when any form of urban renewal takes place, it still seems a relatively low sum. This is not a criticism of the Government, because, as I said two years ago, this was a matter in which we had had little experience. We hope that the momentum of these expensive types of development will go on increasing, but if they do the financial needs will, therefore, go on increasing, too.
Reference was made in the last debate to the increased expenditure which would arise from what was then the Housing Act, 1961, in relation to the duties placed upon local authorities in connection with houses in multi-occupation, and largely in relation to the employment of increased numbers of staff. Here, again, it would help if we were told whether this factor comes into the grant formula at all, and, if it does, whether it has any appreciable effect.
Turning to the Increase Order for a moment, the right hon. Gentleman made the point that part of the increase was due to the estimated increase in cost arising from the higher interest rate following the raising of the Bank Rate. There is also, I think, a sum of over £2frac12;million for various items, which include costs of transport and fuel, and presumably the same increases come into the estimates on which the general grant is based. Is it possible to identify particular causes of an increase? If it is, it will


help the House enormously to be told which parts of the increase allowed for in the course of the next two years are attributable to these factors.

Mr. Crossman: I think that I made it clear that the increase is accounted for only up to next March.

Mr. Corfield: I appreciate that. But presumably the same factors come into acount in the general grant. The general grant represents an increase over the current year's spending, and if it is possible to identify the proportion of the increase which is due to the increased cost of these items, that will be helpful.
In the last debate my hon. Friend the Member for the Isle of Wight (Mr. Woodnutt) raised two interesting points—they certainly interested me at the time—about the rather peculiar position of that part of the country. First, he raised a question which arises from the increased transport costs and the fact that it is an island. He suggested that the Isle of Wight should be included in the same category as the Scilly Isles, where I understand that the length of the sea lanes is added to the road mileage to increase the weighting in the road formula. Secondly, he raised the rather curious manner in which the assessment of prison populations affects the rateable value of places in which there are large prison populations. It would be helpful to my hon. Friend and to the House if we were told what further consideration has been given to those points and whether the Government have reached a conclusion.
The right hon. Gentleman referred to £20 million in the second of the two years, and I thought that he made it clear that this was £20 million above the figure finally agreed by his Department rather than £20 million above the estimate originally put forward by the local authorities.

Mr. Crossman: Roughly speaking, it is about the same as the estimate put forward. If the hon. Member adds this sum to the figure to which we cut them down, he will get back, roughly, to where they were before.

Mr. Corfield: I am obliged to the right hon. Gentleman. That is the point which I wanted to bring out.
I turn to perhaps the most important aspect of this Order from the point of

view of both local authorities and the ordinary member of the public—the effect on the rates. The right hon. Gentleman was very keen to say that this was a great instrument for shifting the burden from the taxpayer to the ratepayer. It is an equally good instrument for shifting the burden from the ratepayer to the taxpayer. As I said in my closing speech two years ago, there is nothing sacred about the figure of 56·6 per cent., 51·5 per cent., or whatever percentage it may be. Yet we have the right hon. Gentleman paying lip-service to this great urge to relieve the ratepayers while he sticks rigidly to exactly the same percentage as that which, as far as I recollect, his right hon. and hon. Friends criticised only two years ago.
It is not good enough to say that this is an instrument which works only one way. Indeed, he claimed that the whole object of the exercise by the last Government was that we should increase the burden on the ratepayer for the relief of the taxpayer. But if we have a proportion of over 50 per cent., then for every increase in the total bill, more falls on the taxpayer than on the ratepayer. That was our policy. There is no reason why the right hon. Gentleman should not have used this instrument, ready to his hand, to increase the Exchequer contribution and to lighten the rate burden. He will recollect, no doubt, from what was said in his own manifesto that it was not just that we were to have one of these endless reviews to which the Government have committed themselves in their 100 days. I nearly said "famous 100 days", but those famous 100 days had a rather unhappier ending than, I imagine, the right hon. Gentleman contemplates for the 100 days of this Government.
But we have had any amount of effort by the Government to pass off their promises as reviews of this and that and cancellations of something else. But what was stated in their manifesto was:
While the reform of the rates system and investigations of alternative forms of local government finance may take some time to accomplish, we shall seek to give early relief to ratepayers by transferring a larger part of the burden of public expenditure from local authorities to the Exchequer.
We may have sympathy with the right hon. Gentleman in his difficulty in coming to the task with the election interfering


with his calculations, but when they fought the election his party took the trouble to produce a little pamphlet which they issued with the manifesto and which, as far as I recall, was entitled, "What the new Britain will be like when Labour wins". It contained the delightful phrase,
''Labour is ready. Eager to take over. Poised to swing its plans into instant operation.
Instant Government. A number of prominent members of the Government drew attention to this specifically in their own election addresses. As I said earlier, it is no good the right hon. Gentleman saying that he has not a weapon with which he can fulfil his promises at the moment. There is no doubt that even if he were able, within the rules of order, to elaborate the reasons why he dislikes the general grant, it would make an admirable interim instrument to do exactly what he promised to do and what his right hon. and hon. Friends promised to do.
I hope that the Parliamentary Secretary will say not only why this decision has not been taken, but when it is likely to be taken. Although the right hon. Gentleman was at pains to say that this is for a two year period—which is statutory; there must be two years or more, so I am not attempting to claim a point here—he agreed that it did not necessarily mean that the review would not be completed by then. But it seems rather odd that such considerable attention was paid to the second year, with the figure of £20 million deliberately added, and therefore, looking right ahead to the second year, if the right hon. Gentlemen contemplates abolishing this system earlier. It does not give the impression that there is a great deal of urgency on the part of the Government to fulfil what they said they would do.
I have no doubt that I would be trespassing on the indulgence of the Chair if I were to embark on a discussion of the merits of general grant versus specific grant or any other kind of grant. But I think it fair to say that the general grant, whatever the right hon. Gentleman may say, definitely adds to the responsibilities of local authorities compared with the specific grant. It is also worth remarking, in view of the bitter attacks which were made on the idea

when it was first put forward, that it has not and cannot be shown to have in any way affected the growth of expenditure on education.
I hope that the right hon. Gentleman will agree that anything which detracts from the true responsibilities of local authorities and anything which tends to assimilate them more to the position of agents of the central Government is bound to make them that much less attractive to the people of the calibre which local authorities require. In view of the remarks of the First Secretary of State and Secretary of State for Economic Affairs about planning boards, along with the astonishing definition of the functions of the Minister of Land and Natural Resources given by the Chancellor of the Duchy of Lancaster the other day, there seem already to be factors which could well become a considerable threat to the independence and responsibilities of local Government.
I hope, therefore, that the Minister will go somewhat wider than the figures in the Order itself, let alone in the Report accompanying it, and say what the Government have in mind about the future of local government. Local government finance so clearly, on the one hand, conditions its future, and, on the other, is conditioned by it. I hope, therefore, that we will have a speech in reply to the debate which will attempt to fill in some of the large gaps which the right hon. Gentleman appears to have deliberately opened.

Mr. Deputy-Speaker (Dr. Horace King): Order. I think that it will be convenient to the House if I remind hon. Members that we are discussing only the general grant and that it would not be in order for the Minister who will reply to the debate to respond to the invitation he has had to have a complete review of the future of local government and the whole of the Government's policy on local government.

4.33 p.m.

Mr. G. A. Pargiter: I approach these matters with rather mixed feelings. I will deal, first, with the Increase Order and in doing so I hope that it will be realised that the local authority associations are disappointed that the 1963–64 figure has not been further adjusted by the inclusion of about


£900,000 of additional expenditure which would undoubtedly have ranked for increased grant.
It is suggested that the 1963–64 figure could not be included with the 1964–65 figure because the amount is not considered, presumably by the Treasury, to be large enough. I suppose that £1 million is not much to the Government, but it is certainly a lot to local authorities. It means more to me than I can calculate, because I do not know what £1 million even looks like. I repeat that the authorities were most disappointed that the figure was not included, particularly since there would not appear to have been any relevant reason why it should not have been included.
It is said that the two years could not have been taken together for the purposes of making an adjustment for the increased grant. I do not suppose that at this stage the Minister will be able to change the Treasury's mind about this, but I hope that the matter will be examined, for if we are to get increased General Grant Orders in the future local authorities should be able to benefit to the extent of all relevant expenditure. It is not satisfactory for them merely to be told that the amount was not sufficiently large. After all, what is considered not large enough to be included for the purposes of a General Grant Order? It is important that authorities should know the answer.
I am in the position of having taken part in the negotiations for some years past and I know a little about what goes on. The first thing is that the authorities send in their estimates, which are then considered by the relevant Department. This has happened over the years. The Department almost inevitably says that the estimates are too high. "They are inflated and cuts will have to be made," local authorities are told. In the past, local authority officers have been cooperative in making cuts in their estimate. Indeed, I think that they have been too co-operative, as is indicated in the second year of each of the two year periods.
This is apart from the first grant period, when everyone recognised that the Government leaned over backwards to prove how good the general grant was. Local authorities must spend money and the amount of grant they

got was in excess of anything they received in any subsequent period. However, we are now in the position where they are losing out on both years in the excess of expenditure over their estimates.
It should be remembered that one can get an increased grant only on specific grounds; that is, increases in costs which are shown to have occurred since the estimates were accepted for grant purposes. Thus, if a cut is made in the estimates none of that can be got back. One can get an increase only if it can be proved that there have been increased costs.
This all shows that the first figure is particularly important. If present legislation can be amended so that we may have increase Orders on relevant expenditure which is properly incurred, matters would not be too bad, but at present authorities are always having to fight for any extra because of the limitations of the legislation. As I said, the first year is very disappointing to local authorities, particularly from the point of view of the cut of £17 million.
My right hon. Friend said that the forecasts had been done extremely well. As he knows, we have used a computer for this purpose. This is not a Government computer, but one made available by Cheshire County Council. As a result, there was a remarkable degree of accuracy in the forecasting.
We expect the various Government Departments involved to make some initial cuts, probably if only to make local authorities prove the necessity for the amounts sought. In this case, although the figures were submitted in ample time for the Departments to go through them and query them, the suggestions of the Departments were made known only one day before the meeting with the local authority officers. At that meeting local authority officers had to meet officials of the Government Departments to discuss the cuts which were proposed.
It was a sheer impossibility to do this within the time-table. We had to have a statutory meeting and the Minister had to get the Order, but it seems to me that somebody should look at the Departments and the way in which they work to ensure that at least when estimates have been submitted in reasonable time the


authorities should be given reasonable time to examine the proposed cuts and, if necessary, make counter proposals. This did not happen on this occasion and we were faced arbitrarily with the £17 million cut.
We recognise the factor that there had been a General Election, but this ought not to have stopped departmental examination of the figures. This is something which I do not understand. The examination of the figures, quite apart from the conclusions which the Treasury or the Minister might have arrived at about the final figures, should have gone rather better than it did. I hope that this will not happen again. If it does, it will leave local authorities in an awkward frame of mind and they will not be as friendly in their approaches to the Minister as they were on this occasion.
I might say, on behalf of all the associations, that, apart from the material factors, about which they differed, the associations appreciate the spirit in which the Ministers met them, even if the Minister of Housing and Local Government did not restore the cuts made in the first year. We at any rate hope that from that friendly basis we shall be more successful in future than we have been on this occasion, particularly in respect of the first year.
We recognise the facts of life and that when the Government are running at a deficit, which the Government found in terms of the money that was available, it would have been too much to expect the restoration of the whole of the £17 million, though we might have expected the restoration of half of it even if the Treasury did find itself in some difficulty.

Mr. Woodnutt: When you talk of a deficit are you still——

Mr. Deputy-Speaker: Order. The hon. Member must put his question through the Chair.

Mr. Woodnutt: I beg your pardon, Mr. Deputy-Speaker. I should like to ask the hon. Member what he meant when he said that the Government found a deficit. We are referring to an internal situation and money available internally. What does the hon. Member mean?

Mr. Pargiter: I find when I look at my internal money and my external money

that there is not much difference between them when it comes to paying. I have either got it or not got it, and whether I can play about with it by means of credits or debits at some stage makes no difference to the fact that I have to produce the cash when it is required. I cannot see any material difference between the two.
We appreciate that there are many things which the Government might have wished to have done early in their term of office but which they were not able to do and would not be able to do because of the conditions that they found. I am not accepting this necessarily as an excuse for the cut of £17 million. I still very much regret that it was made and I still think that it was unjustified on the figures. Already, as admitted by the Minister, the Government have had the advantage of good forecasting as a result of the method used by the local authorities in presenting their estimates to the Department.
I come to the second part and I thank the Minister, though rather grudgingly, for the restoration of the £20 million. I do not want to be too effusive about this, because the £20 million is amply justified. There is no question of there being a gift in it. This is money which we can easily demonstrate will be needed. If our experience in the second year over each of the grant periods is taken into account, it will be found that the local authorities have been at the losing end all the time. This is one of the arguments which can be used against the general grant. There is no means of making up this loss. Once it has been lost it has been lost for good, and the general ratepayers cannot understand why they should bear a burden which quite properly ought to be borne by the Exchequer.
It is often difficult to see two years ahead what developments there will be. On the whole, local authorities, instead of being as extravagant and irresponsible as was at one time suggested if they had a percentage grant instead of the block grant, have always been careful in the preparation of estimates. It has been shown that we have been at the losing end in the second year of each grant period and I am sure that this £20 million added as an ad hoc figure—the only way in which it could be added in the circumstances and in the time available—


is not a sort of contingency or bonus figure.
In future, a Minister might say, "We have given you £20 million", but the Government have not. We in the local authorities have had the restoration of cuts proposed to be made which the Minister has decided now should not be made. We are grateful for this, but we are not too grateful because we shall regard it merely as a jumping-off point to ensure that we have better terms in future.
I do not want to go into the question of any alternative method, but I am sure that the local authority associations, and I know that it is the case with my own county council association, will be happy to enter into discussions with the Minister and other appropriate Ministers on these matters. My right hon. Friend will be aware from correspondence that we are already concerned about the increasing burden of the rates, and under the General Grant Order the burden of the rate will increase next year and the following year and there is nothing in the grant system which will alter that situation.
I accept that the percentage could be altered, but alteration of a percentage does not necessarily cover the whole picture in relation to specific services in the best possible way. I am not suggesting where it will go or how far it will go, but we shall be glad to enter into discussions with the Minister to see whether an alternative method can be found which will be fair to the ratepayers and will stop this increasing burden which they are called upon to bear, very often as a result of Government policies which the local authorities have to carry out and in respect of which we often think the Exchequer carries a lesser portion of the burden than it should carry.
My right hon. Friend has expressed his sympathy with London. We discussed this matter at some length. We in the local authorities were glad to find that the Home Office was able to indicate an additional £150,000 for the children's services because of recognition of the fact that the cost will increase considerably in the London area as a result of the operation of the London Government Act. It is no comfort to be able to say, or for the present Government to say, "We told you

so" to the Opposition, when they were the Government and, at the same time, give a rather tardy and niggardly recognition to the amount which the local authorities must bear.
It will be a considerable amount and will be of a kind which will not fall to be dealt with in any Increase Order. We shall not have it back. There is no question of having an adjustment except for increased costs over and above the basis already fixed, and if the basis should prove wrong the London boroughs will have a rough deal during the course of the next two years.
If one suddenly creates posts for 20 or 30 children's officers instead of three or four, or 20 to 30 education officers instead of three or four, it is inevitable that the cost will go up; and these are administrative costs. This is not a question of improvement in the service. This is purely an increase in administrative costs which we think the Government have not taken sufficiently into consideration in the preparation of the figures.
Another point is the inclusion of welfare services in the general grant system. When we discussed this two years ago, an indication was given that these would be included in the general grant figures for the purposes of the calculation, and we rather optimistically thought that this would mean more money. I admit that the Minister at the time was careful to say that it might not necessarily mean more money. I am prepared to accept that no specific promise was made that there would be more available as a result of the change in the method of calculation, but the local authority associations are bitterly disappointed at the failure to provide more money for welfare services over and above what were virtually the per capita grants which we previously had for the provision of accommodation for the elderly and infirm.
The answer based on the possibility of increased pensions and the abolition of the prescription charges does not quite meet the point, in the local authorities' view. I am sure that they will not be willing to accept that as an alternative to a proper increase in the grant. I hope, therefore, that the Minister will say that the question will receive more serious consideration than it has received during the whole of the grant period, not just recently.
Throughout the whole of the time, local authorities have been quite unfairly treated as regards the provision for the aged and infirm. This serves merely to highlight the case, because the same amount of money, virtually, has been included and put into the grant and had the effect of reducing the grant percentage. Had the proposal been that we should receive 56·5 per cent. as against 55·1 per cent., we should have said that, that would be reasonable, but, as it is, we think that it operates unfairly. It has not operated in the way we hoped and we were half led to expect that it might. I hope, therefore, that we shall be told that this question will he seriously considered. It is an essential matter, just as much a part of local government expenditure as any other expenditure is, which ought to be properly included on the same rate of grant as for the health and other services which are provided.
I have spoken rather longer than I had intended. I am disappointed, with this Order, especially for the first year. I am glad that the Minister has found it possible to restore the £20 million for the second year. For this we are grateful. We shall be looking for means by which a very much greater share of the burden may be moved from the local ratepayer to the general body of taxpayers. Obviously, when money is taken from the taxpayer generally, the system operates much more fairly than the rating system can possibly do for the provision of our local social services.

4.52 p.m.

Mr. Mark Woodnutt: I must join issue with the hon. Member for Southall (Mr. Pargiter). He said that, within the framework of the general grant, it was not possible to relieve the burden on the ratepayer. In an intervention during the speech of my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), I pointed out that it is quite easy to relieve the ratepayer of a proportion of the burden simply by putting up the percentage of the general grant. If the Government really want to take part of the burden from the ratepayer and put it on the taxpayer, it can do it perfectly well at once by raising the 55·1 per cent. of aggregate expenditure which is borne by way of general grant.
I do not know why the Minister looked so pleased with himself when he said in his speech that the Government were

pledged to adjust the distribution of the burden. We had already set up a committee to carry out a complete review of the financial relationship between central and local government, and we also had realised that there must be an adjustment of the burden.

Mr. Pargiter: The hon. Gentleman will be aware that the White Paper which was published at the time when the general grant was instituted said that the Treasury was already bearing too much of a burden vis-à-vis the local authorities, and the intention was to shift the burden in such a way that it bore less heavily on the Treasury. The fact that they were paying more than half the total at that time was regarded by the then Government as not being a healthy feature.

Mr. Woodnutt: I am aware of what was said in the White Paper. All I am saying is that, if the Government want to shift the burden, all they have to do is to increase their percentage. There is no fixed maximum percentage in the general grant.
Just before he concluded, the Minister said that he was relieving the lot of the ratepayer considerably. In fact, he is not. Keeping the percentage the same for next year means that the Isle of Wight County Council ratepayers' share of the extra burden will be equivalent to about an 8d. rate, and I cannot see how it will be less than that in the next year unless they cut some of their services or make economies in some way.
The first point I make relates to the low density weighting. The House will know that the basis of the calculation is the ratio of road mileage to 1,000 of population, and for this purpose all roads in the local authority area, classified and unclassified, are included. There are also roads which we refer to as green roads or green lanes. These are roads which the local authority has really ceased to maintain although they have a responsibility to do so.
I am not arguing the merits or otherwise of including these green lanes, but remind the Minister that some counties include them in their total mileage for this purpose while others do not. Counties which have suddenly found out—the Isle of Wight is one—that their fellows are including these green roads and which have applied in the last few


months for theirs to be included have been told that it cannot be done. It is wrong that some counties should be including them while others are not.
Clearly, there is an anomaly here. The Minister should correct it, making up his mind one way or the other. Either they should all be included or should not. The effect on total grant will be nil. There will merely be a difference in the distribution of the grant arising from this factor as between different counties, the aggregate remaining the same.
My second point relates to the isolation factor. I refer particularly to paragraph 30 in the Report accompanying this Order. Everyone connected with local government finance will be very disappointed to read that we are not to have a review of the formula. I cannot understand why. It was promised in the debate which we had on 19th December, 1962, and it was promised in paragraph 28 of the 1962 Report. The Minister said it has been overtaken by the review which he is now carrying out, and it was, in fact, overtaken by the review which we started. But the committee has been sitting for about two years discussing the question. There are many anomalies to be corrected and other factors to be brought into the formula. We ought to know what the results of its deliberations over the past two years have been and how the formula should be adjusted.
One factor affects my own constituency rather badly. The Minister will have seen the Report of the Working Party appointed in 1962 to investigate the Working of the Rate Deficiency Grants. Paragraphs 28 to 32 are all devoted to the special position of the Isle of Wight, following a case presented by the Isle of Wight County Council in 1962 which showed that the isolation of the island is a factor not taken into account in the general grant and adding to the cost of the provision of all services by about 4½ per cent. compared with the mainland. In paragraph 30, the Working Party, which was set up by the previous Minister, said that it recognised that there was a prima facie case for a weighting. It also said:
We bring this point to notice so that it may be further considered.

This is one of the factors which I hoped would have been considered in the review and introduced in a formula to take account of this isolation. I ask the right hon. Gentleman to look at this. I suggest again something I advocated two years ago and to which my hon. Friend the Member for Gloucestershire, South referred today—that is, that the Government could give a little immediate relief to the Isle of Wight by including a factor for the sea lanes, as is done for the Scilly Isles. I do not see why this should not be done for the Isle of Wight.
Then there is the question of the prison population, which is calculated for the purpose of assessing the grant by taking the population on a given day in the year. It happened recently, however, that the day chosen for two prisons was the very day when lots of the "lags" had gone home and, therefore, the number of inmates was low. It would be fairer to take the average population over the year because these prisons are very prominent in the local authority services.
The Minister has mentioned the growing burden of rates, as did my hon. Friend the Member for Gloucestershire, South and the hon. Member for Southall. We all realise that it is inevitable that local authority expenditure will increase from year to year by the very nature of the services and the cost of the improvements which we all agree must take place. But most of us are also agreed that a greater proportion of that burden should be borne by the Exchequer. I have harped on that theme ever since I first became a Member of this House.
Many ways have been suggested of easing the rate burden. During the election campaign, the party opposite spoke about switching teachers' salaries to the Exchequer. Right hon. Members opposite may also have suggested that a higher proportion of the cost of education should be placed on the Exchequer.
But the easiest way to bring relief, and to bring it quickly, is to increase the percentage. Right hon. and hon. Members opposite are always talking about the advantages of a percentage grant over a general grant. I cannot see the point of that argument when, in the general grant, there is a weapon that


the Government could use. The Government could put up the general grant percentage of total local authority expenditure to 65 or 70 per cent., whatever they might decide. The weapon is in their hands. They could use it this year. I cannot accept any excuse for not doing so. I hope that the Government will give this matter immediate and serious consideration.

5.3 p.m.

Mr. Bryant Godman Irvine: I ask the Minister to be more specific about his proposals for General Grant Orders. In paragraph 30 of the review it is said:
…the Government has decided that in advance of conclusions being reached on the basis of its own examination of local government finance no changes should be made in the weightings …
I understood that the position before this White Paper was that a working party had been set up to undertake a major review of the position. The right hon. Gentleman has not told us what has happened to that working party. Are we to see any of its conclusions? Is it to proceed to the end of the road. or is it to be swept to one side?

Mr. Crossman: The working party was not designed to reach conclusions, but to collect the evidence and make a survey. This is nearly completed and when it is we shall go ahead with our job, which is to make up our minds what to do. The job of the working party, which was set up by my predecessor, was to do the research work—the basic collection and selection of material on which conclusions could be reached.

Mr. Godman Irvine: I am obliged to the right hon. Gentleman. Perhaps I can put the problem in a slightly different way. Since the general grant was first introduced, I have been placing various considerations before his predecessors in relation to certain parts of East Sussex. I hope that the right hon. Gentleman is already aware that there are ways in which the seaside areas and parts of the country that I represent can be differentiated from other parts of the country.
I have no doubt that, in due course, I will try to avail myself of other opportunities of dealing with these matters with him when he himself is in a position so to do. All I say today is that, in listening to him with as much attention as

I could, I received the impression that, if I were responsible for planning the finances of a county council, it would be a little difficult to know just when or how any decision could safely be taken.
On Monday of last week, the Joint Under-Secretary of State for Economic Affairs referred to Bexhill, which is part of my constituency, as being one of the places in south-east England with the highest percentage of people over the age of 60. On page 14 of the review, where the results of calculations are set out, there is nothing to indicate that, as a result of this factor, East Sussex is in a very much more favourable position than the others. I see that the Minister looks a little surprised. If he cares to have the figures given to him on behalf of my county I will let him have them.
The only other point I put now is that, at the moment, there are a number of factors I should like to put before the right hon. Gentleman at some stage. The working party is now out of the way. When and how should these factors be placed before him? Could he help us as to how forward planning can safely be done in county finance?

5.9 p.m.

Mr. James Allason: I think that most hon. Members would agree that what really concerns us is the effect on the householder and not so much the actual amount of rate-borne expenditure. The Minister says that there has been a steady increase in expenditure over the last 10 years, but he will not have forgotten that, in 1954, industry was re-rated, as a result of which the rate burden on the householder fell by one-third in 1955–56.
This burden slowly crept back to the old position over the succeeding years until, in 1962–63, it was back to where it was before 1955. It is only in the last two years that there has been this increase in the burden and it has not been intolerable until now. I entirely agree that here and now it is intolerable.
I entirely accept that local government expenditure has to increase, but it is not necessary that that increase should fall on the householder. It is unreasonable to expect the householder to see an increasing amount of his income paid out in rates every year.


Yet this is the effect that the General Grant Order will have.
I calculate that the increase in expenditure will be 8·7 per cent, next year over this year and 7·3 per cent. for the year after compared with next year. The general grant takes care of exactly its proportion of that so that, allowing for the 2 per cent. gain from increased valuation, local rate-borne expenditure will increase by 6·7 per cent. next year and 5·3 per cent. the year after. That is intolerable.
In its election manifesto, the Labour Party said that it would take action straight away to avoid these increases. I deeply regret that the Government have not done so. If the right hon. Gentleman would increase the general grant to 57 per cent. next year and 59 per cent. the year after, he would not breach the principle of the general grant, but that action would have the effect of stabilising rate-borne expenditure, which is what we all want to see.
The right hon. Gentleman mentioned the factor of the expanding population. I represent a constituency in a county with the greatest expansion of population, Hertfordshire. However, there are other counties whose populations are expanding. In these areas the problem is that expenditure on things such as schools, roads and sewerage has to be made well in advance of the income resulting from the increasing population. The experience in Hertfordshire has been that every year an average of 1 per cent. less comes from the general grant, so that we are dropping from an original average of 55 per cent. to 50 per cent. this year and probably to 49 per cent. next. This is clear from the evidence which has been given to the working party.
I agree that it is very difficult for the Minister precisely to work out a beautiful formula which will make it just about right, but he could have a rough shot at it and make some effort now that it is accepted that there is this problem of expanding populations. To give him an instance of the sort of thing I have in mind, I can speak for Hertfordshire in saying that an increase in its general grant of about £1¼ million, while not enough, would be acceptable and I think that we would be prepared to settle for that.
I may be speaking for almost all county treasurers and for many millions of householders if I make an offer to the right hon. Gentleman. It is that he should take this General Grant Order away and take a little more time about it and then, although that will have made life more difficult for the local authorities, come back with a higher proportion of general grant. He could do this easily. It is not reasonable for him to complain that he has not had the time, for I am offering him the time now.
If he does not do this, it will be clear that there is a great difference between Labour Party promises and Labour Party performance. I very much regret that I have to use the same words that I used yesterday—to ask whether the Government have not come to power on a false prospectus.

5.14 p.m.

Mr. A. E. Cooper: The Minister will not be allowed to get off the hook on this subject of giving relief to the ratepayer. Throughout its General Election campaign the Labour Party made it perfectly clear that relief for the ratepayer would be one of the earliest problems to which it would give attention. Eight weeks after coming to power, with every possibility and opportunity in their hands to give relief to the ratepayer, the Government have failed to do so.
The rate burden is the most serious problem confronting the average householder. I am sure that the House will approach the problem constructively in an attempt to secure an easy solution. The right hon. Gentleman seems somehow to be bemused with this figure of 55·1 per cent. He told us that he had had only eight weeks to look at the problem and that there were probably some hon. Members who knew more about it than he did. He never spoke a truer word, because if ever there were a Minister who displayed complete and absolute ignorance of local government, it was the right hon Gentleman this afternoon.
When the hon. Member for Southall (Mr. Pargiter) complained about the new costs to be imposed on London government, he forgot, and the right hon. Gentleman forgot, that the London Government Act was to define new areas


of government in London, not to define the cost of that Government. That was obviously something which would follow. It is unfair of the right hon. Gentleman to take the immediate situation, for these new authorities are not to operate until next May and cannot have any idea of what the cost is to be.
There will not be the proliferation of offices which he has suggested. In my own area of Redbridge, where there are two new boroughs making one authority, we do not envisage this great new cost which the right hon. Gentleman has been discussing. All I am asking is that he should free his mind of prejudice against the London Government Act and—and I am asking a lot—give the new authorities time to settle down, when he will see that most of his fears are not justified.

Mr. Crossman: I hope the hon. Gentleman will not misunderstand me. I was reporting to the House what the representatives of the London local authorities said to me. What they told me was about the greatly increased administrative costs caused by the London Government Act. It was not my prejudice but their fact. They spoke on behalf of their boroughs. They made the complaint to me.

Mr. Cooper: Two sets of organisations are now operating. The existing borough councils are to operate until May of next year. New councils have been set up as a result of the Act and the Greater London Council is operating as a holding authority for this one year. That applies to the others. In this period of changeover there will obviously be redundant officers. For example, in Redbridge there are still two town clerks, but when the new authority starts in May there will be only one.
Many other authorities have problems when they have two top officers, or other officers at various levels, of whom one is being kept on in a consultative capacity for a year or two because he has not quite reached retirement age. This is a method of causing the least possible distress to men who are getting on in years and who would find it difficult to get another job.
But this is a problem which will resolve itself in a matter of two or three years. What I am asking is that the right hon.
Gentleman should give the local authorities a chance to settle down. Let them get their plans organised and he will then see that his fears are not justified.

Mr. R. W. Brown: It is 1st April next year when the new authorities will take over, not May. I say that in case there is some confusion on the record.

The Minister of State, Home Office (Miss Alice Bacon): The figure which London gave us in respect of the child care services was an extra £800,000 a year which it was calculated would be needed specifically for the break-up of the children's services in London.

Mr. Cooper: I am not aware of the figures given to the hon. Lady. If that is what she tells me, I must obviously accept it, but I would have thought that there would be other factors to justify an enormous increase such as that. However, it would be profitless to deal with that matter now.
The right hon. Gentleman's strictures on the system are not valid, because under Section 2(4) of the original Act he has power at any time to make an Increase Order for certain items. For example, it is said in his own Report:
…if it appears to the Minister that during any grant period there has been an unforeseen increase in the level of prices, costs or remuneration
the right hon. Gentleman can present an Order increasing the grant. There is nothing wrong in the system. It is only in the Minister's mind that these difficulties arise.
My objection to what the right hon. Gentleman said this afternoon is that he took no account of that part of the section of the Act which says that unforeseen increases in the development of services cannot be taken into account. Therefore, if the Labour Party is to be true to its election pledges and expands the education system as it promised, presumably the local authority will get no increase at all in its grant. Or are we to hear from the Minister that in the next two years there will be no expansion in the education system?
However one studies the figures of these two Orders, they allow of no increase or expansion in the education service other than that planned by the


Conservative Government. Account is taken only of increases in the number of teachers planned by the Conservative Government. Account is taken only of the increase in the number of new schools planned by the Conservative Government. No new initiative whatsoever on the part of the Labour Government is shown.
Therefore, since the Minister is asking us to authorise the expenditure of grant up to 1966–67, we are entitled to ask him this question: will he increase educational development in this period beyond what was planned by the Conservative Party? If so, and since this will call for a great deal more expenditure on the part of local authorities, what steps will he take to relieve the ratepayer of this increased burden?
The Minister, at the beginning of his speech, mentioned his abhorrence of the general grant system. But, as is not unusual, he did not offer one single argument to show why the system was wrong. In fact, it is very difficult to find anything wrong with the system. It is generally approved by local authorities. Even Labour councils like it? Why?—because it enables them to plan long-term and to get their decisions taken and working quickly. There is not a local authority which has not gained great benefit from operating this system.
I know why the Minister does not like it. It is because it takes control out of Whitehall. It gives control to the local authorities, which the Labour Party does not like. It wants everything nice and tidy in Whitehall. The doctrine laid down by the right hon. Member for Battersea, North (Mr. Jay) some years ago was that the man in Whitehall knows best. It is still a doctrine which is dear to the hearts and minds of the Labour Party. The Government must come forward with very strong arguments to show why the general grant system, for which they are asking substantial sums, is wrong. Personally, I think that it is very good.
Turning to the sums of money involved, the general reorganisation of local government which has taken place, particularly in the London area, will obviously call for a complete reallocation of the sums for the various authorities. The appendix

lays down the figure which Redbridge can expect. Redbridge, as an authority, does not come into existence until 1st April next year. By whom were these figures submitted? Were they submitted by the Essex County Council, by the Ilford Borough Council, or the Wanstead and Woodford Borough Council in isolation, or were they prepared as a result of joint discussions with the authorities in Redbridge? It may be that these figures are quite proper, but I should like to know that there have been proper discussions at that level and that they have not been arrived at as a result of—and I do not use the word offensively—guesswork within the Department.
The Minister was a little evasive when I spoke to him about the transference of a certain item of expenditure to the national Government. He claimed that if he dealt with that he would be out of order. Nevertheless, I repeat the question so that I can get it on the record: what will be the position of the Government in the years 1964–65, 1965–66 and 1966–67 with regard to teachers' salaries? This is a question to which the House is entitled to an answer at some time. What account has been taken in these calculations of the increase of 3s. 3d. in the National Insurance stamp which operates from next year and which I calculate will amount to a very large sum indeed? What account has been taken of the increase in Bank Rate and petrol duty? What allowance has been made of any increase in education expansion?
These are questions to which the House is entitled to an answer. Looking at these figures, it would seem once more that the Government have failed to keep another of their election promises. May I suggest that when the famous 100 days are over it will be a good thing if the Prime Minister declares a national day of mourning.

5.26 p.m.

Mr. Geoffrey Rhodes: I did not intend originally to take part in the debate, but I feel that I must intervene because it seems that hon. Members opposite are trying to make party political capital out of a very difficult problem for which the former Government were largely responsible. Under the General Grant Order, very substantial aid is being given, and it is intended that it should be given,


to local authorities in the next year or so. But it was said quite clearly by my right hon. Friend the Minister that, in spite of this, obviously an increasing burden of local government finance would fall on the shoulders of the local sources of income, namely, the ratepayer, in the next year or so. This is inevitable.
The hon. Member for Hemel Hempstead (Mr. Allason) said that during the election the Labour Party promised to deal with the problem of local government finance straight way. I am not sure exactly what was implied by "straight away".

Mr. Allason: May I give the hon. Gentleman the quotation:
…we shall seek to give early relief to ratepayers by transferring a larger part of the burden of public expenditure from the local authorities to the Exchequer.

Mr. Rhodes: It is a question of what one means by "straight away". The hon. Gentleman also used the word "early". If he says that "early" and "straight away" are identical in meaning, that is fair enough. But I believe that when another party takes over the reins of office, having been in opposition for 13 years, it inherits a very substantial number of problems. A number of emergency Bills have been presented in the last few weeks. It would be unfair to criticise the Government for not immediately, here and now, completely altering the basis of local government finance in a fundamental way. My right hon. Friend, I understood, said that in the near future consideration would be given to altering the system of local government finance in a fundamental way.
If the argument of hon. Members opposite is that this should have been done more quickly, may I draw their attention to the fact that in December, 1963, the then Parliamentary Secretary to the Ministry of Housing and Local Government said that there was no "really satisfactory alternative" system of financing local government. That was just a year or so ago. It is grossly unfair of hon. Members opposite, within a few weeks of the formation of another Government, to say that the whole basis of local government finance needed alteration straight away. The fact that it would be done straight away in the first few days of a Labour Government was never implied.

Mr. Cooper: I do not think that any of the speeches from this side today have suggested that it was possible for the Minister to come forward with a fundamental change in the financial structure of local government. What we have said is that the Minister now has at his hand the simple weapon of increasing the figure of 55·1 to 57 or 58. There is nothing in the law of the land to prevent him from doing it. He could have done it straight away and given aid to the ratepayers while he was giving thought to the long-term problem.

Mr. Rhodes: The hon. Member is saying that the substantial sum of money which is being granted to the local authorities over the next year or so should be even more substantial by increasing the percentage given under the Order. That is one way of dealing with the problem. I would regard it as a piecemeal solution. In my view, what is required is not a piecemeal solution but a fundamental review of the whole of local government finance. That cannot be done overnight.

Mr. Temple: rose——

Mr. Rhodes: I have given way rather a lot. It should, however, be borne in mind by my right hon. Friend that this is a fundamental question of burning importance. Rates are a special levy on house occupiers in particular. They are a tax on house occupation. In view of the burdens of owner occupation and of tenancy, of which my right hon. Friend will be fully aware, this imposition is something which should be dealt with urgently.
No longer can we say that the rateable value of property and personal occupation bears any serious relationship to an occupier's capacity to pay this tax. It is a particularly heavy burden on the family man who needs a larger house. There may have been a time in the last century when there was a relationship between the rateable value of property occupied and the income and the capacity to pay of the occupier, but I doubt whether that is anywhere near the truth today.
I do not want to get out of order, but I should like to draw attention to the problem that exists in many cities, particularly in Newcastle. When property was reassessed under the legislation of


the former Government, supported by right hon. and hon. Members opposite, the proportion of the rate burden switched considerably away from commercial and industrial premises to the occupiers of residential accommodation. This was particularly true in the City of Newcastle.
There are in my constituency many houses with ludicrously high rateable assessments in what is classed as a pleasant residential district backing up to shipyards and bone yards making glue, and so on. This is a problem of urgency. In some respects, I agree with hon. Members opposite in sympathising with the problems of the ratepayer. I do not sympathise with their viewpoint, even when I have felt that they had fought hard in trying to change the system of local government finance during their 13 years of office, in supporting the revaluation Measures which passed a considerably greater burden on to the shoulders of owner occupiers.
Therefore, whilst I am happy to support the Order today and I believe that the grant which is being given to local authorities is generous, and as generous as can be expected in view of the current financial situation, as a matter of great urgency my right hon. Friend and his associates in the Government should give priority to tackling the basis of the financing of local government, because I agree that the financing of the expansion of our education services over the next four years will be beyond the capacity of house occupiers to carry.
Although there will be substantial increases in finance to local authorities through the General Grant Order to finance that development, it will still mean far too heavy a burden upon the shoulders particularly of young family men who are trying to develop their family life in houses suited to their needs. I urge my right hon. Friend to give priority to this matter in considering legislation in the near future.

5.35 p.m.

Mr. R. W. Brown: I should like to participate in the debate in order to reflect the view of the London boroughs. I am surprised when I hear hon. Members opposite speaking about what could be done by my right hon. Friend the Minister when one

realises that the position in which local government in London is now placed is due to the reorganisation of London government.
Right hon. and hon. Members opposite refused consistently to answer my colleagues and I when we visited them from time to time asking how much this would cost. They refused point blank to tell us. When, three years ago, I put forward the figure of a 10s. increase in 1965 in the rate for the area which I represented, nobody disputed it. As chairman of the finance committee in question, I have little doubt that I shall be forced to impose a substantial rate increase for the people of the area in April next year. I still feel that to bring up the rateable value idea will mean at least a 3s. rate increase.
Hon. Members opposite cannot get away with what they regard as an attack on the Government in failing to give more money to the local authorities when it is they who are responsible for the position in which we find ourselves in local government in holding a position without considering the situation which will take effect on 1st April.
When we take on the new functions from the London County Council—and I am a member of a local authority which is doing just this—we will be building up a proliferation of officers whom it is necessary to have. The organisation has to be set up. In my area in Central London, for example, we will be responsible on 1st April for children's homes way out at Chislehurst. To obtain control over those homes in the way that is necessary, the staff must be built up and made available. Thirty-one other London boroughs will have to do exactly the same thing, because they have homes well outside their borders. Whereas formerly provision of this kind was centralised under the London County Council, 32 boroughs have to build up staff to take care of the very same thing.
There is a similar situation concerning welfare. We are now building up this tremendous issue where we have to try to solve the problem. We are having to buy buildings to house the homeless families after 1st April, because the local authorities will be statutorily obliged to do this. No longer will they be able to say that it is a matter for the London County Council. They must themselves accept responsibility immediately in


April. It is, therefore, nonsense to say, as the hon. Member for Ilford, South (Mr. Cooper) suggested, that if the local authorities are given time to settle down, they will be all right.
My authority has a £22 million capital debt to which right hon. and hon. Gentlemen opposite contributed a great deal. I was a member of a deputation which saw the hon. Member for Gloucestershire, South (Mr. Corfield) when he was a member of the previous Government and put this problem of local government finance to him. We had many discussions about it, but after 12 months he still had not replied telling us what he was proposing to do. We saw him in September, 1962, and the first reply that we had from him was in September, 1963. This problem of local government finance has existed for a long time, and it is just not on for right hon. and hon. Gentlemen opposite to suggest that my Fight hon. Friend can deal with it within seven weeks of taking office.
I am sad that my right hon. Friend has not been able to suggest that on this occasion London should be treated differently because of the difficulties placed on it. I again appeal to him to find some way of ameliorating this harsh burden which is going to fall on London ratepayers, if not at the commencement of the Order, at some time in the not-too-distant future.

5.41 p.m.

Mr. John M. Temple: We have had a useful debate on this complex subject of the General Grant Order, and I should like to welcome the Minister to our rather select deliberations. As I look round the Chamber, I see many familiar faces which have changed sides but which have a continuing interest in these Orders.
We are looking forward to an interesting winding-up speech from the hon. Member for Widnes (Mr. MacColl), because in days gone by he used to have to rely on his slide-rule and the long division sums which were checked by his right hon. Friend the Member for Fulham (Mr. M. Stewart), but now he has the great advantage of having the Cheshire County Council's computer behind him, and I have the great privilege of representing a part of that council's area.
One of the significant factors in this debate is that we have had so little time in which to consider the complexities of these Orders. I accept the Minister's statement that as far as he was concerned there was very little time indeed, but the hon. Member for Southall (Mr. Pargiter), who I regret has left the Chamber, rather let the cat out of the bag. The hon. Gentleman is Chairman of the County Councils Association and he told us that the negotiators from the local government side received the Ministry's calculations only one day before they were asked to discuss these matters departmentally. This is not good enough.
We, as Members of Parliament, have had precisely five days in which to digest these comparatively complicated matters. Those five days included the weekend, and it did not improve my weekend to have to settle down to a study of the General Grant Order on a Sunday and to have consultations with the Treasurer to the Cheshire County Council over the weekend. However, local authority officials are most accommodating where matters of this nature are involved, and in an emergency they will discuss these matters even at the weekend.
I shall try to pick up a few of the points which have been made during the debate, reinforce one or two minor points which I have discovered for myself with regard to this Order, then endeavour to draw attention to the sheer size of the expenditure which is embraced within this Order, and, finally, come to that very important point covered by a number of my hon. Friends, namely, the question of the relativity of grants to rates.
I tried to intervene when the hon. Member for Newcastle-upon-Tyne, East (Mr. Rhodes) was speaking, but he would not give way. He quoted what was said by my hon. Friend the Member for Gloucestershire, South (Mr. Corfield), and I should like to put it on the record that at c. 1330, on 19th December, 1962, I asked my hon. Friend, who was then the Parliamentary Secretary to the Ministry of Housing and Local Government, whether he could justify the sanctity of the relativity of grants to rates,—the 56·5 per cent.—and he was frank enough to say that he could not. In other words, the Government of that time never said that there was any particular sanctity in


this relativity. Therefore, it is a matter which could have received attention by the present Government, and could have altered the whole picture.
I was glad to have the support of my hon. Friends the Members for the Isle of Wight (Mr. Woodnutt), Rye (Mr. Bryant Godman Irvine), Hemel Hempstead (Mr. Allason) and Ilford, South (Mr. Cooper). They all made the point that there was no justification whatsoever in the present circumstances; recognising that the rate burden would go up, for the Minister to stick so rigidly to this percentage—56·5 as it was before, and 55·1 as it is today—as if it were sanctified. A small shift in the percentage can effect a great change in the weighting of local government finance from the ratepayers' point of view.
My hon. Friend the Member for the Isle of Wight rightly drew attention to the special position of the Isle of Wight. We have only biennial debates on this important matter, and I remember that two years ago my hon. Friend drew attention to the special position of his constituency. I think that the point made by my hon. Friend should be looked into during the general review of local government finance which has been promised by the present Government as it was by the preceding one.
My hon. Friend the Member for Hemel Hempstead drew attention to another factor which I believe should be taken into account in formulating any further proposals with regard to the general grant. It is the factor of expanding population. In the present General Grant Order there are factors which have regard to a declining population, but I do not believe that there are any factors which have regard to an expanding one.
My hon. Friend the Member for Ilford, South, in a particularly powerful speech, said that the Minister had not got the Labour Party "off the hook" with regard to its approach to local government finance. I agree with my hon. Friend, and I shall return to this later, because what he particularly referred to was the proposed expansion of the educational service as set out in the Labour Party's election manifesto, and I suppose that even 60 or 70 days after the publication of the Manifesto we are entitled to presume that this is still official Labour Party policy.

Mr. Crossman: Mr. Crossman indicated assent.

Mr. Temple: I am glad to see the Minister nodding. If that is the case, there is no proper provision in this grant order for the expansion of the educational service which was looked forward to by the Labour Party when it published its manifesto.
I said that I would pick up one or two what I regard as minor points in this Order. The first point to which I refer is that referred to by the hon. Member for Southall. He said that no Supplemental Grant Order had been brought forward for 1963–64, and he added—and I agree with him—that the local authorities had thereby lost about £l million in grants. I am not going to criticise the Minister for not bringing that forward. I am just drawing attention to that fact, and I suggest that when grant periods of two years are to be considered, the Supplemental Orders should cover the two years concerned. I realise that the Government cannot do that at the present time, but I believe that this matter should be considered during the major review of this problem.
With regard to the General Grant Order itself, there is this new factor of the aged and infirm. During his speech I asked the right hon. Gentleman how the financing of this matter had been handled. His answer was what I expected, that this figure had been taken into account without any allowance for any specific grant which was within that Order prior to it being taken within the General Grant Order.
It would appear that continuing this practice has reduced the relativity from 56·5 per cent. to 55·1 per cent. I can say that the local authority associations are very exercised about this matter. This means that in future, if this relativity is to be sancrosanct—it appears that the Labour Party think that it is at least for the next three years—then indeed the educational services will attract within the General Grant Order a grant of the proportion of only 55·1 per cent. rather than a figure of 56·5 per cent. This is a relatively important factor because the local authority associations are inclined to think that the cost of the aged and infirm service may well grow at a lesser rate than the growth of some other services within the General Grant Order. So I believe that this is another factor


which should be looked at closely in the general review.
Having read the Explanatory Memorandum, I realised how wrong one can be. I thought at first—I put a marginal note in my own memorandum—that the £20 million special allowance for 1966–67 was a windfall. Having a little experience of the Treasury, I knew that these things just do not happen. Again the hon. Member for Southall let the cat out of the bag—the Minister confirmed this—that the £20 million was, in fact, slightly less than the figure which had been "lopped off" the local authority estimates. What the Minister did not say was in the first year, 1965–66, over £17 million had been lopped off and nothing supplemental was put into that Order. I do not accept the excuse that the Minister put forward, because it is a remarkably thin one, that it is rather more difficult to estimate what is to happen in the second year of the General Grant Order. Of course it may be more difficult, but was it not rather significant that in fact the £20 million was replaced in the second year when by that time the present Government hoped, perhaps, to be rid of some of their financial difficulties? I believe that is something which needs explanation.

Mr. Crossman: To get this fairly on the record, my hon. Friend the Member for Southall (Mr. Pargiter) was, of course, perfectly correct in saying that local authorities had to meet that in the second year. This happened on each of the three years when the Estimates had inevitably been under-estimated. We therefore decided that they had proved their point, and whereas in the first year the Estimates and the outcome had been virtually coincidental in the second year they had not. So it seemed reasonable to put in the £20 million because every probability existed that the actual outgoings would be roughly substantially at that level. There was no trick about this. I think it was fair play on our part to the local authorities to do so and an improvement on the practice of our predecessors. The second year period permitted the local authorities to over-spend and, therefore, to have to pay out of rates what should come out of the general grant.

Mr. Temple: I accept that the right hon. Gentleman had an argument, but I do not think that it was a very power-

ful argument. I should like the hon. Member for Widnes to clear up whether the amounts which have been lopped off on this occasion are larger or smaller than the amounts lopped off in 1962 under a Conservative Administration. I have good reason to believe that on this occasion the Labour Government have lopped off considerably more than the figure which was lopped off in 1962 so that I do not think the Government will be able to claim on this occasion that they have been extraordinarily generous towards the local authorities.
What should concern the House tonight is the sheer size of the figures which we are discussing. I do not think it is profitable to go into the underlying factors within the formulae. I believe that those factors are extraordinarily carefully weighted. It may well be found that further refinements could be made, but I am convinced that in this country, under the grant system which we operate, we have the finest financial mechanism in the world for distributing central Government money to the local authorities. Therefore, I make my position and the position of my party perfectly clear when I say that we stand tour-square behind the system under which this General Grant Order was produced.
As I was saying, the sheer size of the figures is, I think, causing concern at present. There is a difference between 1962 and today. In 1962, when we were discussing this matter, there was an authoritative report from the Association of Municipal Corporations. I studied that report, and I made a comment during the debate that it was over-complacent with regard to the growth of local authority expenditure. But on the basis of what the local authorities were thinking at that time, I believe that the then Conservative Government were perfectly justied in taking up the position which they did. Very significantly, the local authority associations have now shifted their ground. The Association of Municipal Corporations has produced an extraordinarily valuable document, dated 29th October of this year, and entitled "Finances of Local Government." In this document concern is expressed that public expenditure, particularly local authority expenditure, is growing at a greater rate than productivity.
The County Councils Association take an almost identical view, and so we are in fact facing a different situation today than the situation which faced the then Government in 1962. All the reliable indicators point to a very rapid acceleration in the growth of local authority expenditure. Taking the figures within this Grant Order it is estimated that there will be an increase, in those seven years, up to 1967, of about 70 per cent. of the total amount of money required; the estimated expenditure under this Grant Order. But the Association of Municipal Corporations reckoned that local authority expenditure, that is rates plus grants, are in fact growing at the rate of 10 per cent. per annum cumulative at the present time.
The effect on the ratepayers—I think that this is accepted by hon. Members on both sides of the House—of this Order will be that they will face an increase in rates each year of something like 7½ per cent.; perhaps even 8 per cent. or 9 per cent. I should like the Government spokesman to tell us what is his best estimate of the increase in the rates which will face the ratepayers of this country as a result of this Order going through in the form in which it is produced tonight.
Very significantly, the Conservative Government were containing total public expenditure in the eight years up to 1961. Total Government expenditure relative to the gross national product was declining. During that period local government expenditure was rising relative to the growth of the gross national product. Today we face a situation where local government has to face an increasing expenditure which will go up almost automatically as a result of the various committees which have been set up for education, as a result of the Report of the Buchanan Committee on traffic in towns, and as a result of the redevelopment of our cities. Again we face this situation against a background of growth in expenditure which far exceeds the growth of rateable values and the growth in the gross national product.
I hope that I have made my point. That the whole economy of Britain will be affected by this rate of growth of local government expenditure and this General Grant Order is a major factor in the whole of local authority finance. By

the time of the last General Election I should think that this was pretty well known to the Labour Party. Yet the Labour Party at that time in its Manifesto was consistently urging that more money should be spent on education. [HON. MEMBERS: "Hear, hear."] I am glad to hear those "Hear, hears", because that confirms exactly what I have said.
With the full knowledge of the effect of increased expenditure the Labour Party was urging further expenditure. But they did not say that there would be any delay in giving relief to ratepayers; in fact, they envisaged a situation in which they would give relief whilst carrying out this full investigation of local government finance. They said, however, in the explanatory memorandum to this Order that they would not be able to give any relief until the review had taken place, although in their manifesto they laid stress on the fact that they would be able to give early relief to ratepayers.

Mr. Crossman: We shall.

Mr. Temple: The right hon. Gentleman says, "We shall". I will explain to the House how this early relief could have been given. It could have been given by way of this General Grant Order, and passed by the House tonight. I do not think that there would have been any disagreement about it if the relativities in this Order had been shifted. This is the key to the whole situation. We know that the Government have the advantage of a computer behind them, but when I spoke to the Chief Finance Officer of the Cheshire County Council and asked whether he would have any difficulty in distributing this relief under the general grant formula, he said that there would be none.
So we know that there would have been no difficulty in distributing the money; the only question was whether the Government were prepared to give rather more money from central funds to local government in order that there should be relief for the ratepayers. I would have thought that this could be done far better within a general grant system than within a specific grant system, just because the general grant system has special regard to the sensitivity which is felt by local authorities when there is any increase in their burden.
I want to explain this factor of sensitivity, because it is important in this context. Let us suppose that the proportion was increased so that 65 per cent. was found by way of grant and 35 per cent. by way of rates. That is the position that has been put to me by the Association of Municipal Corporations which would take care of the teachers' salaries, which was the question raised by the Labour Party manifesto. Just because local authorities are raising a smaller proportion by way of rates, rating authorities will be even more sensitive to an overall increase in the total amount of money expended within the services taken care of by the Order. Therefore, so long as the general grant system is preserved in being, a shift of these relativities would give aid to ratepayers whilst preserving financial responsibility.
I have been wondering why there has been a delay in bringing forward this Order.

Mr. Crossman: Delay?

Mr. Temple: I am suspicious about delays. I went to the Vote Office day after day, saying "When is this General Grant Order expected?" and I was told, "It will be with us at 2.30 in the afternoon." Then I was told that an embargo had been placed on it. I wondered what was happening behind the scenes, and whether the Treasury had had a hand in the matter.
As a back bencher I have had occasion to be suspicious of the Treasury in dealing with financial matters in connection with local government. Was it the Chancellor of the Exchequer who sent a note to the people taking part in these negotiations to the effect that there was an upper limit to the figure which could be agreed? Was it the First Secretary, the economic Poo-Bah of the Government, who has now demoted the Chancellor of the Exchequer? I can hardly believe that it could be the First Secretary, because I have always known him to be a very open-handed man. We welcome his brother in our discussions today.
I always welcome the First Secretary as being expansive. If this question about relativities had been put to him, and it had been explained to him that through this General Grant Order a

much happier situation could have been brought about for the ratepayers, I am sure that the right hon. Gentleman would have seen to it. But there has been such a proliferation of Ministries under the present Government that the First Secretary has no doubt not even heard about these matters. He has probably not heard that his right hon. Friend the Chancellor has placed an embargo on a higher figure which would have helped local authorities and ratepayers.
When next May comes round ratepayers will want to know why the Government have not given further relief, which they could perfectly well have done through an Order of this nature. I am afraid that ratepayers will suffer and I am sure that this Order will be a very big disappointment to them.
May I conclude with a few words about the magnitude of local government finance today. Two years ago the expenditure envisaged within this type of Order broke through the figure of £1,000 million. That figure is an extraordinarily high one from anybody's point of view, but tonight we have an estimated expenditure for 1966–67 of £1,340 million—a very significant uplift. I estimate that the total United Kingdom local government expenditure taking rates and grants together, will be £3,000 million in 1966–67. At that stage local government expenditure of grants and rates will be considerably in excess of our whole defence expenditure.
It is, therefore, clear that we are not discussing something small; we are discussing something which is very large and which I believe bankers across the world are watching very closely. Unless there is sensible control of public finance there will not be much confidence in our economy.
I reinforce the question put to the right hon. Gentleman by my hon. Friend the Member for Ilford, South (Mr. Cooper): where do the Government stand in regard to the increase in education expenditure? The Labour Party election manifesto was very clear on this matter. I read it closely. I hope that the right hon. Gentleman keeps it under his pillow and reminds himself what the Labour Party said in it, namely,
Our country's 'investment in people' is still tragically inadequate.

Mr. Crossman: Hear hear.

Mr. Temple: All the estimates within this Order were based on the realistic policies of the Conservative Government, and if the right hon. Gentleman is now saying that his policy is to increase the amount of education expenditure, what he is really doing is bringing before us tonight a document which will prove to be extraordinarily misleading. More than that, the Order will have the effect of placing a much heavier burden on ratepayers, because an increase in the services cannot be taken account of in a supplementary grant Order.
The Conservative Party is extraordinarily proud of the fact that it introduced the general grant system. I believe that the system is immensely valuable for forward forecasting. I was surprised when, at the commencement of his speech, the Minister sneered at forward forecasting. He said, "How can we look two years ahead?". That is exactly what I have been saying about the Labour Party for a long time; they cannot look even 12 months ahead. Two years they say is far too long. But that is what we tried to do through our general grant system. We know now that the Labour Party has adopted a policy under which it intends to reverse the sensible forward forecasting which we always adopted, and return to a system of percentage grants, which is not wanted by the electorate or by the local authority associations.
The system of local government finance which we introduced will stand the test of time. I have said that the Labour Party could well have come to the aid of the ratepayers tonight. I trust that the Parliamentary Secretary will explain just why the Government did not decide to give help to the ratepayers through the general grant system which they could certainly have done through this Order.

6.10 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The hon. Members for the City of Chester (Mr. Temple) and for Gloucestershire, South (Mr. Corfield) have pointed out that these biennial occasions on which we discuss the general grant always have something about them of the air of an old boys' reunion. The few of us who

are devotees to this extremely exotic art discuss things that most people probably find quite incomprehensible.
I am malicious enough to share with the hon. Member for the City of Chester some delight in thinking that my right hon. Friend, who only a year ago probably thought that general grant was an American President, now has to face the grim realities of sparsity factors, and the rest. It is, in a way, sad that something as human as local government expenditure on the welfare of people should be so closely linked with these abstruse and quite incomprehensible calculations.
Both hon. Members quoted a good deal from my own speech of two years ago, and I am, of course, happy to think that this has now become common form, to which people will refer in future years in order to get ideas for debate. One thing that the hon. Member for the City of Chester said last time but has not mentioned today—and it would have been, perhaps, a little more generous if he had—was that it should seem necessary to discuss these complicated matters late at night. He complained that it was monstrous that the Government should be putting on this vitally important part of the Government expenditure after ten o'clock. That is something that tonight——

Mr. Temple: I am grateful to the hon. Gentleman for giving way, and so giving me the chance of putting things right. In 1963 we were discussing a Supplemental Grant Order, which is customarily taken at a late hour. In 1962 we started our deliberations immediately after Question Time. Perhaps the hon. Member will check that.

Mr. MacColl: I did check it, because I took the precaution to read the hon. Gentleman's speech. It is, of course, desirable that we should discuss these matters at a reasonable time——

Mr. Corfield: The hon. Gentleman is wrong in what he has said. The debate on that occasion finished at 6.22 p.m.—not a.m.

Mr. MacColl: The debate to which I refer, in which the hon. Gentleman spoke, was at ten o'clock. It may have been in the later year—I accept that at once, of course.
We have from time to time had interesting discussions about the welfare and efficiency of our computers. The hon. Gentleman should congratulate his distinguished constituent on the great contribution he made to the work of calculating local government expenditure. I am told, though, that it is not true that the introduction of computers has been uniformly successful. I think that the hon. Gentleman found that at times they were not always right, and had to be rather carefully checked.
It is a comment on our system of local government grant that these marvellous instruments that can translate the Bible into Russian, or compose an aria in grand opera, can get completely hysterical when asked to calculate what amount of grant should be given to a county council. It is time that we cleaned up the mess that we have got into with this general grant. The hon. Gentleman and other hon. Members have said how proud they are to have introduced general grant, yet not one of them spoke without some complaint about the way in which things had been working, and the trouble there had been in reaching figures.
That, to some extent, is part of the answer to the question: why did we not do more in this General Grant Order to meet some of the difficulties that face local authorities? A number of suggestions were made. Some hon. Members asked why we did not just increase the percentage of approved expenditure in order to get an increased grant. One obvious answer to that is that if we were rigidly limited in the maximum grant we could distribute we would be limited in regard to the weighting factors in order to ensure that the money went where it was wanted. One also had to consider the effect on the rate deficiency grant, otherwise some local authorities might find themselves worse off than they were before.
The hon. Member for Gloucestershire, South illustrated this when he asked what had been happening about urban renewal. This is a slow business. It is a matter of revenue, not of capital investment. It is the loan charges item that gets into the approved expenditure for the general grant. But there is no means of ensuring that any one authority that indulges in urban renewal gets back

the money in grant. This is because the money goes into the whole pool that is allocated to local authorities without any regard to whether or not they are going in for urban renewal. That is one of the difficulties of merely increasing the aggregate of general grant. It is necessary to look at the whole interrelationship of local government finance and the workings of the grant system.
The hon. Member for the Isle of Wight (Mr. Woodnutt), who complained about this uncertainty, answered himself, because he proceeded to demand changes in the weighting factors. In particular, he asked why we had not pushed on with the review of the weighting factors, and quoted the case of the density calculations which he more or less implied were "fiddles". He implied that local authorities use different types of road measuring to effect their weighting factor for density per mile of road—in itself sufficient evidence of the extraordinary inadequacy of the weighting factors upon which we must be dependent in order to distribute the money going to grant.
We have been asked why we have not done something bold and decisive in seven weeks. We are asked to change the whole basis of the weighting factor. In this connection, I must draw attention to paragraph 30 of the Report relating to the Order. After referring to paragraph 28 of the 1962 Report, it continues:
… it was stated that the formula was to be thoroughly reviewed.
I just pause to point out that it was not until 1962 that the previous Government began td think of reviewing the working of the grant, and that we are expected to have solved all these problems in seven weeks. In 1962, four years after the introduction of the Local Government Act, 1958, the previous Government began, for the first time, a review of the weighting factors.
The Report goes on:
That review was overtaken by the previous Government's general review of local government finance"—
That was not our general review but that of the previous Government—changing their mind under political pressure and deciding that there would have to be a general review. So the present Government came in to find that the review of the weighting factors was


in cold storage whilst the general review was taking place.
The paragraph goes on:
… and after consultation with the representatives of the local authorities the Government"—
that is, this Government—
has decided that in advance of conclusions being reached on the basis of its own examination of local government finance no changes should be made in the weightings, beyond those required to ensure, as far as possible, that proportionately the same amounts are distributed …
In other words, this standstill, which had been begun by the previous Government, was accepted by this Government. Until the general review had taken place we felt that it was not wise to have a partial review which, clearly, would hold up the whole proceedings because of the need to rediscuss and renegotiate with the local authority associations.
The hon. Members complained about the lack of time they had had to consider this Order and the unfairness of having this complicated business thrust at them at short notice. I quite agree and I thoroughly sympathise. I do not take a different view in office from that taken in opposition, but the position would have been far worse if we had tried, during this seven weeks, to start on a fundamental revision of the machinery for allocating the grant.
So that local authorities should have time to prepare their estimates, and to know what grant would be produced, we had to go on with the existing increase, accept the existing figures and prepare the General Grant Order and rush it through with inadequate notice. There is nothing else we could do if we were to treat the local authorities fairly.
My hon. Friend the Member for Southall (Mr. Pargiter) made some extremely fair and pungent criticisms—as is his duty as a very prominent member of the County Councils Association—of the workings of the whole of our discussions about general grant. I can tell him that I am sure my right hon. Friend will want to look very carefully at the whole machinery for consultation and to do everything that can be done to be quite certain—not necessarily that we are agreed, because there would not be much fun in negotiating if we always agreed

—that full weight is given to representations by the associations.
My hon. Friend the Member for Southall and my hon. Friend the Member for Shoreditch and Finsbury (Mr. R. W. Brown) have this common approach to these problems. They are the unfortunate people who have to try to work these things which the last Government produced. They have to tackle this problem and they have the ever-present problem of the growing burden on the rates. I know that my right hon. Friend is acutely aware of the need to take into account their problems.
My hon. Friend the Member for Southall also complained that we were too rigid in our control. He was not distinguishing in this respect between this Government and the last, but suggested that Whitehall was too rigid and inflexible in negotiations. That made for a little irony when the hon. Member for Ilford, South (Mr. Cooper) said what a wonderful thing the general grant was because it provided freedom and independence for local authorities. The truth is that in any system of grant where central Government funds are providing more than half the grant it is extremely difficult to avoid having a great deal of discussion and negotiation before agreeing about how much to give.
The hon. Member for Gloucestershire, South also asked what had happened to child care expenditure. I understand that the position is that in the Increase Order this expenditure under Section 1 of the 1963 Act appeared separately because it was an entirely new thing. Therefore, we could measure the impact on the estimates, but, once a year has passed in which child care expenditure, including expenditure under Section 1, is merged in one operation, and it is partly for preventive work and partly for supervision, it becomes difficult to say which are the particular increases due to Section 1. The increases then are in the general increase of expenditure on child care.
I think that I am right in saying—this is not a calculation of the computer, but is my own arithmetic—that that increase is £3 million.

Mr. Corfield: I am not trying to catch out the hon. Gentleman, because I remember how difficult it is to keep all these things in one's mind, but I cannot


find reference to this in the Increase Order, although it may be in the Scottish Order.

Mr. MacColl: It is in the Increase Order for England for last year and in the Scottish Order this time. Once we have had a complete year of a new service it is difficult to winkle out the amount spent on that particular service.
My hon. Friend the Member for Southall asked how far the recent increases due to increases in taxation and other financial changes are included in the General Grant Order. The answer is that increases for the tax on petrol have been included because that is a basic increase which is expected to continue unless there is a change in legislation. The rate of interest—this was done also by the previous Government—is put in the Increase Order because we can measure only to the end of the year the average rate of interest. We hope that in the new year the rates of interest will begin to fall. If they do not there will have to be another Increase Order to meet them.
Another point raised was why could not something be done about rising population as a weight as well as falling population? I use the same caveat here I used when quoting paragraph 30, that all this must go into a general review. I am advised that there is no evidence that an expanding authority finds this so difficult as an authority with a falling population. If the overheads are separated, when more people come into the district expenses do not go up as they do when there is a falling population and the same staff and facilities have to be employed.
Questions were continually asked about education. I think that it is perfectly clear that in so far as educational expenditure has been estimated and as in the local authority estimate such expenditure has been regarded as going up, it is included on the estimate covered by the grant. We certainly hope there will be considerable changes in education. If there are, that would require further legislation. One of the things which will be included will be the impact on local authority finances.
I am sure that the hon. Member for Gloucestershire, South will agree that we cannot get into the general grant hypothetical expenditure. He said that

to me when I was trying to get him to put in Section 1 expenditure shortly after the Children and Young Persons' Act, 1963, was passed. He said that it was only a Bill and it could not be included. That will be covered in the "general review of education policy."
My right hon. Friend looked at the rate burden, mentioned by the hon. Member, and said that about 5 per cent. or 6 per cent. per annum was required. If the hon. Member thinks that this is due to prodigality by the present Government—although I do not want to rub in the point—I cannot help asking why nothing was done by the last Government to meet this problem. In 1962, already the impact was being felt. The time to meet the ratepayers' problems was when it could be done in a situation in which one could manœuvre —at the time of the last Order and not under the present Order when we are under pressure.

Mr. Temple: The hon. Gentleman keeps asking why we did not do these things. I explained that the local authority associations, in 1962, were relatively complacent about the situation. Today, the reverse is true. That is why it was right to do what we did then and wrong to do what the Government are doing now.

Mr. MacColl: If the local authority associations were reasonably complacent in 1962, they were the only people who were complacent. We were having debates in this House about the impact on local government finances. The truth is that the last Government hoped to get over the difficulty and hoped that they would not have to do anything about it. They were muddled and confused, they changed their minds at the Blackpool conference, and left us with a welter of indecision which will take a long time to resolve by producing a final constructive answer to the problem.
That is not to say that we have done nothing about it. We were asked to compare the amount which had been lopped off the local authority estimates by the Government. The position is that in 1962 for the first year the amount lopped off was 1·14 per cent. By the second year it was 1·33 per cent., which illustrates that what had been happening was that local authorities had been estimating


more for the second year but had not been believed and the estimates had been cut down, although the turnout often showed that they were fairly accurate. We in our first year cut off 1·39 per cent.
Faced with coming in, as we did, in the middle of these discussions, and with the whole of the financial problems, we had to cut off 1·39 per cent. But for the second year, which had gone up under the previous Government——

Mr. Corfield: Am I not right in saying that the object of the cut-back is purely on the basis of his Department, or his advisers, not being satisfied that the local authorities are able to spend that amount? So the question of what financial situation the Government may or may not have been faced with does not really arise.

Mr. MacColl: The hon. Member for Gloucestershire, South is, I think, perfectly right, but the hon. Member for City of Chester was on very different lines. He was saying that the Treasury, being faceless men, ruthlessly cut down the expenditure because they wanted to avoid the grant. I think that that is not far wrong. I do not know whether I am allowed to say that now, but, at any rate, I said it last year.
But what has happened is that instead of cutting more off the second year—and this is the important point—we are only to cut off 0·05 per cent. instead of 1·57 per cent. which is what it would have been if we had followed the previous policy. Therefore, although my hon. Friend the Member for Southall is quite right in saying this is not largesse—it is money earned—it is really a substantial help to the local authorities and is based on the principle that while we are reviewing the position and trying to work out a more tolerable and fairer system of grant, we do not want the local authorities to be handicapped.
We hope that it may very well be that by the second year we shall have got something to produce, but it is a slow business to get it through, and one cannot be too optimistic because parliamentary procedure and consultations take a long time. But if we do not get it through, at least we have given a token of our

good will to local authorities and an indication that we want them to go on developing the efficiency of their services.

Mr. Corfield: The hon. Gentleman has not answered the main question. All he has said about whether or not we could alter the relativities was to select the one planning grant, with which I fully agree with him is slightly in a class of its own, whereas the main weight of this order falls upon education. Education, with the health services, comes, I think, to ten-elevenths of the total and the formulae are designed very largely on the basis of the educational needs so as to distribute the main bulk of this in relation to the needs for education. So there is really no reason why he could not have increased the 56·6 per cent. or the 55·1 per cent. and given more money to the local authorities, and he has not faced that point.

Mr. MacColl: I did not take planning as a chief debating point. I took it because it was the only specific point that the hon. Gentleman raised. If we take the question of education, we have the Member for Rye (Mr. Bryant Godman Irvine) asking why his area got no more grant when it had a very large elderly population. The answer is that it has very few children and that is why the grant is low. The question of the repercussion of these changes on different local authorities has to be very carefully examined and renegotiated with the authorities otherwise we should have been faced with extremely harsh criticism from the people who felt that they had got the wrong end of the stick.
The hon. Gentleman has been roughed up by the hon. Member for Bournemouth, West (Sir J. Eden) in his day for not having been sufficiently considerate to people in retired areas, but the whole of the Rating (Interim Relief) Act was brought in to deal with the problem of retired people. We cannot just lightheartedly go away and say we think it is all right, that it will work out more or less, unless we can be clear of what is happening. We have to give a chance to the authorities to express their views. When the computer produced the results of the effects we would have had to get their views. That would have held the Order up. We cannot afford to play about any longer with the local authorities. We must get the Order through and


we have had to have this standstill arrangement for next year.

Question put and agreed to.

Resolved,

That the General Grant Order 1964, dated 8th December 1964, a copy of which was laid before this House on 10th December, be approved.

General Grant (Increase) Order 1964, dated 4th December 1964, [copy laid before the House, 9th December] approved. —[Mr. Crossman.]

LOCAL AUTHORITIES, SCOTLAND (GENERAL GRANT)

6.36 p.m.

The Secretary of State for Scotland (Mr. William Ross): I beg to move,
That the General Grant (Scotland) Order 1964, dated 8th December, 1964, a copy of which was laid before this House on 10th December, be approved.
It might be convenient to discuss with this Order, the next Order.
That the General Grant (Increase) (Scotland) Order 1964, dated 3rd December, 1964, a copy of which was laid before this House on 9th December, be approved.
We come to what is properly called by the Scottish local authorities the most important financial Order to come before this House. We are dealing not with small sums of money, but with sums of very considerable magnitude and sums which are growing each time we deal with this price of legislation. Some years ago, the sum involved was £82 million: this was the total relevant expenditure estimated after discussion with the local authorities. By 1966–67, according to our latest round of negotiations, the total relevant expenditure has gone up to £140 million. This gives an indication of the pressure upon local authorities of expanding services—services which may well be becoming more expensive.
It is more or less because in the past there have been criticisms of the effect upon this of fixed percentages applied to a rising sum, leaving a widening gap to be met from a system of raising money which is itself inflexible, certainly from five years to five years, and which does not reflect the rise in the gross national product as it comes to the Exchequer through national finance, that I have suggested in the past that there should be a fresh look at this and a transfer certainly to the national Exchequer of

burdens presently falling, and falling with unfairness in relation to particular types, on the local authorities.
It may well be—I hope that it will be the last time we shall have a General Grant (Increase) Order of this type, because the equity of apportionment is, to my mind, suspect as between the central authority and local authorities and, indeed, as between the services. Within these large sums creating this difficulty for local authorities there is one service dominating everything else. Important as the smaller services are—local welfare services; welfare of the aged, of children and of the handicapped; road safety; registration of electors, in respect of which we could suggest improvements and increased expenditure—these tend because of this domination to be crowded out and they do not always get the importance and the rate and pace of development, which we would all like to see.
It is for this reason that over many years we on this side when we were in opposition asked the Government to take action urgently to go into the whole question of changing this relationship. As my hon. Friend the Member for Widnes (Mr. MacColl) said on the last Order, it was not until 1962, belatedly, that the Conservative Government even thought that there was a problem. The Allen Committee has been sitting for some time. Its Report will not be published until next spring. The Committee is considering the incidence of rating upon various categories of ratepayers. Then there is the interdepartmental review of expenditure as between the central authority and local authorities, and within that there is the problem of the justice of the rating system itself.
So we are faced with the position that we shall get some of the information which will lead us eventually to put this matter right. That will have to be followed by legislation. So I hope that no one will rise and ask me why we have not yet done it. One does not legislate in advance of the facts, and one does not legislate in this House in seven weeks with a majority of four. So it may well be that this will be the last of these Orders.
By Statute we must make provision for two years in advance. This Statute is a weak vessel. I remember that at the time of the original discussions in 1957 the Government suggested that they wanted


even further provision made and that it should be at least two years. There was talk then of three years. But we have never advanced beyond two years. After three Orders of this type covering periods of two years—six years altogether—after five years we have been forced into the position of introducing four supplementary increase Orders and another one tonight. We had one this time last year. The hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) will remember it, because on that occasion she led the field for the Government.
This shows the weakness of the position. The Increase Order can only catch up with certain things laid down by Statute—unforeseen rises in costs, prices and remuneration. Any changes of policy which take place within the two years cannot be covered. Fresh legislation is required for that. Any increased pace of development or change of emphasis cannot be covered. To this extent a new Government coming into power in October are faced with the position that negotiations have been proceeding since the summer and yet, if they want to anticipate the effects of their policy which are likely to arise in the second year, they have the task of trying to see into the future and make the necessary changes. I personally would have preferred, if the legislation had provided for it, an annual review in such circumstances, but in the absence of that we must make the best of the situation as it is. I suggest that we should avoid this kind of difficulty in the future when we come to legislation.
It is because of these difficulties that we have two innovations in the Order. First, there is £1 million, which comes, not from nowhere, but from over a year ago. I think it was in December, 1963, that the then Government introduced the Rating (Interim Relief) Bill for England and Wales to take notice of the hardships caused by rising rates and try to deal with them by directing certain reliefs to particular categories of ratepayers. The legislation came into effect in 1964. That was dealt with, but nothing was done for Scotland, but we got the promise in 1963 that an extra £1 million would be put into the next General Grant Order. So it comes tonight. In other words, the Tory Party promises but the Labour Party fulfils.
The Government at that time knew that there would be another Government. I dare say they hoped it would be a Tory Government who would have to meet the pledge, but the fact was that they committed a future Government to expenditure in this respect. We have fulfilled the promise. In the Order for 1965–66 there is £1 million in respect of that rate relief. It cannot be divided or apportioned, as the sum was in England and Wales. It goes into the General Grant and will be apportioned in accordance with the usual formula. Local authorities in Scotland will welcome it, in that it is not allocated to any particular subject.
Secondly, we have provided in the main Order, outwith what could have been determined by the total relevant expenditure, for additional expenditure of £2 million. That represents an additional grant of £1·2 million. In fact, we are in a very much happier position than my English colleague, my right hon. Friend the Member for Coventry, East (Mr. Crossman), who, when introducing his Order, said that the figures had not been agreed. I can assure hon. Members on both sides that we were in the happy position of coming to an amicable agreement with the Scottish local authorities and, indeed, it will come as a surprise to them that after that amicable agreement we even managed to give them an extra £1·2 million of grant. This is an earnest of our concern that we will provide that elbowroom in the second year to get expansion of local authority policies and of services and, indeed, of the pace of provision of these services.
I come to the Increase Order for 1964–65. This is the hardly annual. It means that during the last year of the Tory Government once again prices rose and once again salaries rose. Provision was made. If any hon. Member should ask me what happens in the next two years or in the next year, I can tell him that these increases will be met as under Statute by an Increase Order but limited to the actual aspects laid down in the statute. The total relevant expenditure was an additional £1·7 million. It was met by an additional grant, under the Increase Order, of £1·035 million. That made a total for the year which is ending—1964–65—of £74·335 million.
The point is that this is the second time that we have had an Increase Order, and to indicate the fallibility of our calculations in looking ahead I might point out that the original estimate of the grant was £69 million. It has gone up to £74·335 million, that is an increase of just over 8 per cent. in two years. This shows the pace at which these unforeseen changes have been taking place and it covers to a certain extent part of the increased cost of money. I think that about £250,000 of the increased grant is provided in respect of that for the year ahead. Once again I am happy to say that this was agreed with the local authorities.
On the main Order for the fourth grant period, the Report sets out the whole procedure that was gone through—the biennial battle with the local authorities, they setting out their figures and the officials of the Scottish Office trying to bring them down to what they thought was realism, and tempering optimism with what they considered to be the full facts. All this was during the summer when Members' eyes were fixed on other things, the fate of marginals and the fall of Parliamentary kings. I am sorry if I have to do a bit of parodying of Burns.
The local authorities claimed that for the first year the total relevant expenditure was £l33·1 million and we managed by agreement to have that sum brought down to £131·95 million. They suggested for the second year expenditure of £139·9 million and, believe it or not, they are to get £140·35 million. I therefore can assure a smiling hon. Member opposite that the smiles on the faces of the Scottish local authority members are as wide as his.
It is a tribute to the officials of my Department and the local authorities and to the skill of my hon. Friend the Joint Under-Secretary of State that this agreement has been reached. I do not think that the local authority estimate was over-optimistic. It showed a desire to get the expanded services which they want and which everyone feels should be expanded. To take some of the services for the mentally disordered, the kind of services which we hoped would be provided to make real the provisions of the Mental Health (Scotland) Act, what the local authorities are faced with is not so much shortage of money but shortage of

skilled staff. This is one of the facts that come out of the biennial examination of the deep problems beneath the surface—not the financial targets of the Scottish Office but the things which need to be done to carry out desirable services. I am glad that as a result of this examination these are being actively pursued.
The position of school building actively concerns local authorities, and having mentioned the school-building programmes, where we were initially at odds with the local authorities, I ought to take the opportunity to make our position quite clear. Education authorities generally justifiably feel that swifter action should be taken to replace or substantially improve the remaining obsolete buildings where children are still being taught under adverse conditions. I am wholeheartedly behind local authorities who want to see a much larger school-building programme but—as I have already had to reply to representations for much larger capital investments in the next few years—I am not in a position to be more than sympathetic. All I can say to my hon. Friends is that my inheritance is small.
One of the first tasks facing the Government is to assess the level of expenditure which the country's resources can carry in the period ahead and, having determined the total, then to determine our priorities. This goes beyond the question of public expenditure. It goes into the whole question of all capital expenditure and how the nation is using its resources. There is considerable scope for a shift in the balance of these priorities, and the essential must take precedence over the desirable.
I consider that education is a basic essential. Therefore, while in the short term I cannot hold out any hope of a larger school-building programme than the one at present authorised, I do not by any means rule out the hope of something more than that by the time we reach 1966–67, and this holds for further education too. Partly because of this optimism, and because I was impressed by the views made known by local authority representatives to the Joint Under-Secretary of State at a statutory meeting on 27th November, when they suggested that the local authorities tend to lose out in the second year, I decided to add a margin to the 1966–67 level of local


authority expenditure on the general grant. This innovation, which I mentioned earlier, is described in paragraph 10 of the Report. As hon. Members will see, the cushion of £2 million extra relevant local expenditure has not been allocated against a particular service, and if it is possible during the second year of the grant period for education or technical education to go further and faster ahead, the £1·2 million grant is there to give that additional cover.
I do not want to make a long speech, but it is desirable to look beyond education and see exactly how the services have been expanding, in many cases slower than many of us would have liked and, it may well be, slower than the local authorities would have liked. But they are expanding, and it is not purely a question of increased money being spent. I hope that within the next two years—and we have given an earnest of this—there will be still further expansion in particular fields. There are the local health services. We shall provide more health visitors and home helps. We have to look in this connection at the question of the expansion of services being held up by the shortage of nurses, of auxiliaries, of psychiatric social workers and other staff.
It is interesting to note that provision for services for the handicapped has doubled between 1963 and 1966, from £122,000 to £224,000, but I warn hon. Members that that is not the only and the total financial provision. A sum of £161,000 has to be added because the cover in that grant is expenditure additional to what was there before the introduction of the general grant. Therefore the figure in the table at the back of the Report is not the total expenditure but the part that is covered by general grant.
There is also the question of services to the aged and infirm, which to my mind are very important, as I am sure everyone will agree. We have an ageing population which deserves dignity in old age. I am glad to see the changes which have taken place in the provision of homes for old people if and when they have to be taken from their own homes because they cannot support themselves. There are now 178 local authority homes and some of them are of a wonderful standard. I wish that I could say that about them all but some of them are pretty bleak houses.
The local authorities and the Government are anxious to see that they are improved as much as possible. Some can be improved, but others have to be replaced. There are 18 more being built now, and I understand that 31 are under consideration. As a Government, we are determined to push this forward as much as possible.
These services—I do not want to go over them all—are essential to a progressing community. Education, of course, is the service on which the very future of our country depends. I am glad to see that the figure for planning, the only aspect of the most important service of town and country planning which is covered by general grant, has gone up to as much as £800,000 for the second year. Going back to the beginning of the last General Grant Order, 1963–64, it was then only £301,000. This is an indication of the kind of development work which is going on in our towns. I leave out Glasgow, because Glasgow is treated in a different way. New problems of planning and development are being tackled by our local authorities, and the figure of £800,000 is a measure of the acquisition of land, the cost of land, and so on, and it shows that expansion is going on in this respect.
What is being done in the welfare services, the humanising services, shows that a progressing community really cares, and I hope that the House will see fit to give its approval to these Orders.

7.2 p.m.

Mr. Forbes Hendry: The local authorities of Scotland, and Scotsmen generally, have been looking forward very much to the White Paper on the Order and this debate for two reasons. The first and, perhaps, the least important, though, to my mind, the most interesting, was that the occasion might give us the chance to hear some pearls of wisdom from the lips of the Secretary of State. We are grateful to him for those pearls of wisdom which we have been missing in this Parliament. The second reason was that we thought that we might have the fulfilment of some of the promises made by the Labour Party before the election. Before the election I studied a very interesting document, "Signposts for Scotland",


which hon. and right hon. Members have found rather embarrassing at times and will, I think, probably find embarrassing in the future. Certain local authorities looked into that document and expected great things from the party opposite if it was returned to power. It is now in power, and it seems that all the promises in "Signposts for Scotland", like so many other promises by the party opposite, are being forgotten now that the election is past.
By far the greatest expenditure under the Order is in respect of education. On page 20 of "Signposts for Scotland", the promise was made:
The Exchequer will carry a larger share of the financial responsibility for education. This, by reducing the burden on the rates, will help to ensure that the salaries and status of teachers continue to be improved.
That is an interesting and most estimable statement. I have frequently expressed a similar view, that the Exchequer should carry a greater part of the cost of education. It does not seem to me that it would require any special legislation as the Secretary of State, under our general grant procedure, has a great deal of discretion in making grant having regard to probable expenditure by local authorities.
What do we find in the General Grant Order? Relevant expenditure for education, which, as I say, is by far the greater part of expenditure in this respect, rises by a mere £7 million.

Mr. Ross: A mere bagatelle.

Mr. Hendry: A mere bagatelle, as the right hon. Gentleman says, considering that it is only a 7 per cent. increase in expenditure. It does not seem to fulfil the promise that the Exchequer would
carry a larger share of the financial responsibility for education".
What do we find in the White Paper as an indication of what the Secretary of State has in mind?

Mr. Ross: I do not want to stop the hon. Gentleman's eloquence, but if he says that local authority people have been reading these things, why did they agree to the figures which I have put before the House? Why did they not dispute them?

Mr. Hendry: I am coming to that. I am at this point finding out what the increased expenditure is which the right hon. Gentleman has in mind. In paragraph 13 of the White Paper we are told:
There will be greater expenditure in all parts of the education service, a major increase arising directly or indirectly from the programme of educational building which will continue at a high level.
We are glad to know that it will continue at a high level. The right hon. Gentleman himself must admit that it has, up to now, been going at a record level. Apparently, he in tends an increase over this, and so we look for the places where the increase is to come in educational building. In paragraph 14 of the White Paper we are told:
The enrolment of pupils in primary schools is expected to rise progressively …
and we are told that
the number of secondary school pupils will also increase".
We all admit that, but, if these increases are to take place at the level which the right hon. Gentleman suggests, a 7 per cent. increase in expenditure on education will not go very far to expand the school-building programme, if at all. I refer again to the promise made in "Signposts for Scotland" that the Exchequer is to undertake a greater share of education expenditure and so relieve the rates.
In paragraph 15 of the White Paper we are told:
The further education service is expanding rapidly. The recent rate of growth (about 10 per cent. a year) of the number of full-time students"—
and so on.
I think that we might take this increase of 10 per cent. in the further education service as an indication of the increase in other services, and it plainly bears a very poor relation to the 7 per cent. increase about which we are told.

The Under-Secretary of State for Scotland (Dr. J. Dickson-Mabon): The Under-Secretary of State for Scotland (Dr. J. Dickson-Mabon) indicated dissent

Mr. Hendry: I notice that the hon. Gentleman is shaking his head. Perhaps we shall hear about it later.
We have been told that local authority representatives agreed these figures. It is interesting to hear that, but I wonder how much they were browbeaten by officials


of the Department before they agreed. As the Secretary of State knows, I have for a long time taken the attitude that the amount of money allotted for school building in Scotland has been grossly underestimated. I admit that at once. If my local education authority is displeased with the amount of money allotted, it is difficult to see how it could have agreed these figures when the right hon. Gentleman came on the scene. There is one local authority at least which has not agreed.
On 24th June this year my noble Friend the Member for Aberdeen, South (Lady Tweedsmuir), then Under-Secretary of State, was asked some Questions in the House and was browbeaten by several hon. Members opposite on this very subject of school building. The local authorities which were mentioned at that time did not include mine. Several were involved, and it is difficult to see how the right hon. Gentleman's blandishments could have brought them to agree these figures. It is interesting to look at what the right hon. Gentleman said on 24th June last. He said:
Surely, the noble Lady must have been convinced by what has been shown in debate after debate that there is a great distorting factor here in the provision which must be made within a county for a new town. Will she reconsider this business? How long is the Review to take? Are we to be bound by a recommendation made by a Working Party if we ourselves have no great confidence in its ability adequately to deal with this matter? Why cannot this be separated and dealt with now, since the problem is here?" —[OFFICIAL REPORT. 24th June, 1964; Vol. 628, c. 377.]
It is strange that, now that the right hon. Gentleman has assumed power, the local authorities which he himself represented as being hightly dissatisfied with the position are now perfectly satisfied with the figures set forth in paragraph 10 of the White Paper. These figures must have been achieved by browbeating the local authorities—unless the right hon. Gentleman is very much more skilled in his blandishments than I thought.
There is a serious omission from the White Paper, the question of the increase in the school-leaving age. My right hon. Friend the Member for Argyll (Mr. Noble) indicated that it was the intention of the then Government to raise the age to 16 in 1970, but there is not a

word in the White Paper about the expenditure relevant to that decision. Every hon. Member knows that if provision is to be made for increased school building for 1970 the time to start is now. Experience shows that it takes about five years to get plans finalised for school buildings. If we are to increase school building for 1970, a very great increase must be made now—and such an increase is not reflected in the miserable 7 per cent. allowed for in the Order.
Time and again we have listened in the past to the right hon. Gentleman complaining about the stinginess of the late Government towards the local authorities. I suggest to him that he should now go back to the Scottish Office, put a wet towel round his head and read his own speeches on the subject, so that when next he comes to the House with an Order he takes account of the difficulties of local authorities and deals with them in a very much more generous way than he is proposing to do now.
In "Signposts for Scotland" we read:
… once our educational system has been given this new impetus the difficulties will recede.
That may be so, but I fail to see where the new impetus is coming from. Obviously, education in Scotland, if we are not to get more than is promised in this Order, will recede. "Signposts for Scotland" instead of leading forward is definitely leading backwards.

7.13 p.m.

Mr. John Rankin: In a debate of this nature at this time there must necessarily, I imagine, after listening to the speech of the hon. Member for Aberdeenshire, West (Mr. Hendry), be two backgrounds; the mental background displayed by the hon. Member and the economic background against which my right hon. Friend is presenting the Report, which he summed up in the words, "mine inheritance is small". I appended a little note to that which I think he failed to hear, which was my fault. I wanted to add, "his desires were at the same time without bounds." I think that is true.
There is nothing in what my right hon. Friend has said that need cause any lack of faith in the signposts for the future, which the hon. Member for Aberdeenshire, West seemed to feel. The


hon. Gentleman can go on reading "Signposts for Scotland" to his benefit and encouragement, and perhaps, if he reads it against the proper mental background, he may find himself drifting to this side of the House.
One or two points have attracted me, and it is with these that I want particularly to concern myself. One of them is a constituency point which binds itself into the remark that was made about school buildings. I emphasise one statement made by my right hon. Friend—that in achieving this White Paper and the sums embodied in it he had to secure the agreement of the Scottish local authorities. I think that he himself will agree, as well as right hon. Gentlemen opposite, that no tougher body of negotiators could be met with than the local authorities of Scotland, and the fact that my right hon. Friend secured agreement with them says at least something for his methods of diplomacy.
I was interested to hear the kindly words he used with regard to the provisions for the old. The Report refers particularly to the mentally disordered and to the mentally defective living at home, but I am certain that none of us on either side of the House will forget those aged persons who are living at home and who are neither mentally defective nor mentally ill in any way, but are ordinary old people living alone who will not go to homes because they have reasonable accommodation of their own.
They are today living lives which are a shock to those who happen to come across particular examples; such as when one hears an old person remarking on "beautiful hot water" and realises that, owing to the price of coal, there are people who have to go to bed at least three days a week because they have no other means of heating themselves. One weekly bag of coal is all they can afford, and it means that in winter it is impossible for them to remain in the kitchen or in their other apartment because of the excessive cold that faces them there. Hot water is out of consideration and can only be got when they are able to put on a fire in order to brew themselves a cup of tea. I hope that my right hon. Friend will keep that type of old person in mind as well as the others, as I am sure he will, and see to it that a greater gain is bestowed upon them under the

Labour Government than befell them under the Conservative Government.
In paragraph 23 of the Report, we are told that provision is made for an increase of expenditure on road safety and an increased mileage by police patrols on traffic enforcement work. The amount of money to be devoted to that purpose is a total of £85 million. I welcome that. Many reasons are assigned to the need to provide greater road safety.

Sir Myer Galpern: Is my hon. Friend saying £85 million for road safety?

Mr. Rankin: Two sums are involved—£51 million and £34 million. My hon. Friend will see from paragraph 23 that that money is to be applied to road safety and to increased police patrols. I take it that the sums referred to in the Appendix, road safety £34 million and police traffic controls £51 million——

Sir M. Galpern: Thousands.

Mr. Rankin: That was a lapsus lingucæ. Although the sum is smaller than I should have expected or hoped, it is not an eyesore. I have to make that observation because of the tremendous importance of the need for greater road safety, especially in the large towns, and for police patrols on this work.
I was saying that many reasons are assigned to road accidents and one has been prominently associated with the consumption of too much drink. I do not want to criticise that view. I do not wish anyone to assume that I would encourage any driver to drink. A driver today must have complete possession of all his faculties and should not take alcohol in any form when he is driving.
However, having witnessed the behaviour of drivers alleged to be sober, especially in streets, I am not sure that drink is the chief cause of road accidents. I wonder whether it would not be advisable when an individual is given a certificate entitling him to drive a car to ensure that he has passed the General Certificate of Education, that he possesses the ability to prove not only that he can drive a car, but that his intelligence is a little above that of a delinquent. Observing the behaviour of some car drivers making serpentine curves when overtaking two


cars in Victoria Street, London, as I have seen, I have wondered what kind of mental equipment God gave them and what kind of advance they have made on their original endowment.
My right hon. Friend might consider the creation of a special police patrol with the sole job of dealing with motorists. He might use the many admirable women in the police force, equipping them with motor cycles and turning them out as special police patrols to deal with the danger I have mentioned. My right hon. Friend might consult his right hon. Friend the Minister of Transport to see whether we could not provide special police patrols which would not interfere with the ordinary regular duties of the police, but which would try to deal with this menace on the roads.
I also welcome the first sentence in paragaph 15 which tells me that the further education service is expanding rapidly. I welcome that because for many years before coming to the House of Commons I was head of one of the largest further education centres in Glasgow where I had long experience of the difficulties of this work. Because of these difficulties, it was recognised by every educationalist in the city, and I think in Scotland, that there was a continual pressure gradually to reduce the number of boys and girls attending evening schools for further education and instead to secure the maximum number of releases for education during some other period of the day.
That created a demand for release from employment to take further education. My right hon. Friend tells us that further education is expected to accelerate. I hope that there is some substantial basis for that expectation, because even today one of the greatest difficulties in cities like Glasgow is to get employers to release their junior and juvenile employees for further education. While it is perfectly true that the further education service is expanding rapidly, one of the things which most people who have not been behind the scenes, as it were, do not appreciate is that the number of pupils who enrol to take evening continuation work is fixed by the monthly return at the end of October, when hope is high and the spirit is keen, whereas by the end of

March the numbers on the roll have no relation at all to the numbers embarking on courses at the end of October.
The reason is simply that working all day and studying three nights a week from 7 to 9, or 7.30 to 10, as happens in some cases, is too big a burden for growing youths. Consequently, they get tired trying to undertake the double job of earning a wage and educating themselves at the same time. That fact underlines the immense importance of reducing as far as we can further education centres which meet in the evening and bringing all possible pressure to bear on employers to make sure that their employees are given opportunities to attend education centres during the day.
I come to my final point. I welcome, as I said already, the statement of my right hon. Friend in paragraph 13 in which he says that:
… educational building … will continue at a high level.
As I say, I welcome that statement. And declare a personal interest in it. As the hon. Member for Govan, I should perhaps let the House know that our high school, which provided a six-year secondary course, was burned down some time ago. Since that unfortunate happening, the boys and girls engaged in secondary education in Govan have been attending Bellahouston Academy. This is no disgrace to the Academy. It is in the Govan division, but not in the old Govan borough, which is a very proud and large borough with two of the most important shipyards in the world and one of the finest football clubs, perhaps, not only in this world, but in any other world which hon. Members on either side may visualise. I know that for a brief time it has been playing second fiddle to Kilmarnock.

Mr. Ross: Hear, hear.

Mr. Rankin: But my right hon. Friend lives in Ayr, and Ayr United is near the bottom of the Second Division. Nevertheless, I pay tribute to Kilmarnock Football Club, which is in its present position because Rangers Football Club sent it its outside right as a manager.

Mr. Speaker: Order. The hon. Gentleman must be good enough to address himself to the subject matter of the debate.

Mr. Rankin: I was merely lauding the constituency which sent me here, Mr. Speaker, and I hope that that is a forgivable sin in the Parliamentary sense.
Our high school has been out of commission for nearly three years. The boys and girls in Govan have to attend Bellahouston Academy, but the indignity is that the local authority said that Bellahouston was no longer fit to be a secondary education establishment and built a new secondary school in its place. It is to the old building which the boys and girls go.
I hope that the figure for increased expenditure on education includes provision for the building of the new Govan secondary school and that when my right hon. Friend the Secretary of State answers my Question tomorrow he will be able to tell me of that very happy conclusion to out long agitation.

7.34 p.m.

Mr. Alasdair Mackenzie: I am indebted to the Secretary of State for his clear and explicit statement. I am also glad to note that he has been able to agree with the local authorities concerning the sums to be allocated, as he explained fully in his statement. As one with some experience of local authority work, particularly in the Highlands, I had many times to go on various deputations to St. Andrew's House. I think that the Highland authorities earned the title of, in Scottish language, "bonnie fechters". I should like to compliment the right hon. Gentleman on coming to terms with my friends in the Highland counties.
The Secretary of State made some very important statements. He stressed the need for school building and said that the essential must take precedence over the desirable. I agree with that wholeheartedly. There are many schools in my constituency which come into the first category, and I hope that the right hon. Gentleman will bear that in mind. He also referred to the need for old people's homes. I am very glad to note that good progress is being made in that direction.
Expenditure on all the social services has been increasing over the years. If we want improved services, we must be prepared to pay for them. Therefore, I

cannot see an end to this upward trend in the near future, and this must be borne in mind. It has been suggested that more of the cost of the social services should be transferred from the local rates to the Exchequer. The Secretary of State said that this may be the last Order as a change will be made, perhaps, in two years' time, and I should like to refer briefly to one item which I think should be transferred to the Exchequer, namely, educational expenditure, which places a very severe strain on local authority finances. It hits very hard in areas where there is no large-scale industry to boost the rateable value and the bulk of the rates comes from householders.
Teachers' salaries are by far the biggest item in educational expenditure, and local authorities, I regret to say, are often blamed for this. Yet it is an item over which local authorities have absolutely no control. The position is quite different in respect of some of the other items listed in the Order, such as accommodation for the aged and infirm, fire services, town and country planning, the registration of electors and others which are all very necessary.
It will be generally agreed, I think, that to meet the future needs of education, including the raising of the school-leaving age, and bearing in mind the present shortage of certificated teachers, a massive teacher training programme is required if we are to achieve what we expect of education. This entails a growing burden on the rates, irrespective, I hope, of which party is in office. If we are realistic in our approach to this question, it seems that there is only one answer, and that is for the whole cost of teachers' salaries to be borne by the Exchequer. The sooner that is brought about the better.
Opposition Members said in the earlier debate that they did not have sufficient time to examine the Orders before they came before the House. We in the Highlands expect the Government to move much faster than the Opposition did when they were in office. The aspect of expenditure to which I have referred should be considered very seriously if a change is made in the present system. I impress on the Secretary of State the urgency of taking active steps whenever appropriate.

7.40 p.m.

Sir Myer Galpern: The most significant and welcome contribution during the debate is the hope expressed by my right hon. Friend the Secretary of State that this will be the last occasion on which, under a Labour Government we will be discussing this type of grant. I recognise that my right hon. Friend has been in office only a very short period and has not had an opportunity yet to manoeuvre in that direction, but I urge him to see how speedily he can cut the period before we consider an alternative method of contribution from the national Exchequer to local government expenditure.
The need for that is borne out significantly when we look at the figures which have been submitted to us today. Expenditure by local authorities during 1965–66 as agreed between the Scottish Office and the local authorities will amount to £131·95 million. The grant to be received by those authorities during that same period will be £80·5 million, including the additional £1 million which will give us parity with England. That leaves the ratepayers to find £51·45 million.
When we look ahead to 1966–67, we find that the agreed expenditure will be £140·35 million and the grant from the Exchequer will rise to £84·5 million, which will leave local authorities to find £55·85 million. In other words, there will be an increased burden on the ratepayers in 1967 in comparison with 1965–66, despite a substantial increase from the national Exchequer, of £4·4 million. This shows clearly and highlights the tremendous increasing burden which is falling upon the average ratepayer in Scotland.
We now have, as we all know, a system whereby valuations are frozen for five years. Consequently, under our present valuation system, the only effective method for levying rates means that for five years there will be no variation and, therefore, the only way in which the additional £4·4 million can be raised in 1966–67 is by a substantial increase in the amount to be demanded from the ratepayers.
Therefore, I am sure that my right hon. Friend the Secretary of State, who is fully aware of this argument and who has in the past used it himself——

Mr. Ross: I have done tonight, too.

Sir M. Galpern: —will recognise the urgency of this whole matter. We in Scotland would welcome an early statement upon the new set-up.
When the general grant system was introduced, we on this side, who were then in opposition, opposed it because we preferred, as local authorities preferred, the old system of percentage grants. In my opinion, what has happened with the introduction of the block grant system is that the adventurous and forward-looking local authorities have had to follow a policy of retrenchment because no longer would they get the percentage that was applicable to a certain item of expenditure.
That is most noticeable, particularly in Glasgow, concerning educational expenditure. There we have had more or less to obey the dictates of the Scottish Office. We have had to curtail somewhat our policy for educational advancement, particularly in the replacement of old school buildings and the building of essential new ones. We would certainly welcome a system whereby a go-ahead, enlightened local authority would be able to get or attract a reasonable sum from the national Exchequer by virtue of its enlightened views.
The hon. Member for Aberdeenshire, West (Mr. Hendry) was evidently making a plea for urgency. I do not know why he particularly, in common with his colleagues on the benches opposite, should make such a plea, because during the past 13 years the most significant thing to happen occurred almost 18 months ago, when one of the most powerful deputations from local authorities descended upon St. Andrew's House to complain about the inadequacy of the provision for the school building programme. In all my long period of local government, I never recall such a powerful and united deputation descending upon St. Andrew's House to make demands of that kind.
I regret to say that even within recent weeks there have been murmurings, as my right hon. Friend the Member for Lanarkshire, North (Miss Herbison), who is now Minister of Pensions and National Insurance, knows, because she recently met a deputation in Glasgow when the complaint was made that the capital expenditure allowed to the Glasgow


education authority was inadequate. I agree. For example, there is no reference in the White Paper to nursery schools, yet every hon. Member will agree that that is an aspect of educational development to which attention should be paid. We in Glasgow have earmarked a number of sites throughout the city, but we are not able to utilise them because we cannot get permission to erect the nursery schools which we would be prepared to erect if we were given the go-ahead.

Mr. Hendry: Would not the hon. Member agree that his right hon. Friend stated that local authorities were perfect1y satisfied with the figures which he has quoted?

Sir M. Galpern: Yes. It should, however, be remembered that the deputation goes as one body rather than each local authority presenting itself and its views. It is a composite body which speaks on behalf of all the authorities in Scotland.
There may be indications in the areas that people are not satisfied with what is being done, but for the sake of unity and being reasonable they agree to let things go through, particularly when they have a Government such as we now have, when we know that the assurances and promises in "Signposts for Scotland" will be carried out if we are given time. Nevertheless, I impress upon my right hon. Friend the tremendous urgency of this matter.
Right hon. and hon. Members opposite, and particularly the right hon. Member for Argyll (Mr. Noble), the former Secretaty of State, were guilty of playing snakes and ladders with their educational building programme. Theirs was a stop-go policy with money granted one year, but cut back the next. Local education authorities did not know where they were going or how far they could proceed with their necessary building programmes.
I estimate that in Glasgow, during the past 10 years, as a result of that policy we have spent about £3 million in transporting children from new housing schemes back to the slum schools in the old areas from which they have been transferred. Three million pounds would have given us almost six new secondary schools. That is a colossal waste of money when, had we been given the opportunity, we could have built the

schools. They are still required. We are still engaged in transporting the children at immense cost. For these reasons, I hope that my right hon. Friend the Secretary of State will look at this matter with urgency and that we will be able to spend so that we can save tremendous sums of money and show value for the expenditure.
The other item to which I wish to refer briefly is the registration of electors. I am glad that my right hon. Friend referred to this, because hon. Members may recollect that I initiated an Adjournment debate on the question of the state of our electoral register. I think that we are spending inadequate sums each year on this issue. The total expenditure for the registration of electors in 1963–64 was £345,000. It has now dropped to £336,000, and it is estimated that it will drop still further in 1965–66 to £329,000. I should like some kind of assurance from my right hon. Friend that this matter will be looked into.
Apart from local authorities being happy about the situation. I think that it should sometimes fall to the lot of my right hon. Friend to goad them into taking action in some spheres of activity where they seem to be loath to proceed at a reasonably fast pace. This is one sphere in which consideration ought to be given to urge local authorities to spend a little more money in obtaining more accurate registers, particularly as we have an assurance from responsible Government spokesmen that the whole question of electoral reform is being looked into.
I have already indicated my welcome for the increase in the town and country planning estimates. This is a substantial increase. I wish that I could see the same ratio of increase in other spheres of activity.
I have some mild criticism to make of the provision for physical training and recreation. I submit that the sum of £10,000 is a miserable amount, though I recognise that this is not the whole sum that is being expended. I recognise that education authorities are themselves responsible for spending reasonable sums of money, but I think that the Government have a greater responsibility here. We allow local authorities, for instance those in Glasgow, to erect big housing estates, some almost


the size of Perth, and yet the Government feel that the only contribution they can make to physical training is £10,000. I realise that this is to be increased to £15,000 in 1965–66, but it is grossly miserable and a mere pittance when one considers the work that has to be done.
Glasgow Corporation decided that a good thing to do would be to provide public houses on the new estate. I think that it would be better not to provide public houses unless there was a majority demand for them, but to provide, instead, recreational facilities and so ensure that the people living there do not consider that getting a drink provides physical training and the only form of recreation. I urge my right hon. Friend to consider seeing how far the Government can urge local authorities, particularly those engaged in large redevelopment schemes, such as in Glasgow and the neighbouring areas, to spend substantially more money on the socially valuable and necessary aspect of physical training and recreation.
I hope that as a result of this debate and the assurances which we have received, local authorities, who have a mandate from their electors to go ahead in any particular field, whether in education, in the provision for old folk, in dealing with mentally handicapped children, or in dealing with road safety —and I regret that the money spent on road safety is so little, particularly when one considers the holocaust on the roads —will receive every encouragement from the Secretary of State to do so as speedily as possible with projects which will bring fruitful and worthwhile results to the community.

7.55 p.m.

Mr. Hector Monro: The Secretary of State for Scotland began his speech with a few remarks in general on the problem of local finance. I share his concern. For many years I have considered that it is not a problem of administration but one of finance which has affected local government. I hope that when the review of local government finance that is taking place is completed—and we hope to have the report next summer—local authorities and local finance officers will be given an opportunity to make their represen-

tations before any decisions are made, because it is very important that they should go along with the Government in this affair.
I am pleased that this Order provides for an increase in the sum allotted for planning. Over the years it has become more and more apparent that many committees and authorities want to take more positive action in planning. What they want is not just a permissive attitude, but power to take constructive and positive action to do more for their areas. The introduction of areas of high landscape value, and the opportunity to spend money on amenities, provides planning committees with the chance to spend money if it is available, and any additional money for planning purposes will be most gratefully received by them, particularly so if we are to introduce even a mild ration of the Buchanan Report. It is bound to be very expensive to improve even very small towns, and in the larger towns considerable expenditure will be needed before any effective results can be achieved on the lines suggested in the Buchanan Report.
The Secretary of State said that the local authorities were all smiles. As a member of a county council finance committee I am not in a smiling mood, although perhaps I have a smile on my face at the moment. There is grave concern about the increase in the Bank Rate, because so many loans are being called in. County finance officers are having great difficulty in providing money to replace these called in loans, and I wonder whether the Government are considering an increase in loans from the Public Works Loan Board to offset this difficulty. There seems to be no protection at all for local authority interest rates.
Many hon. Members have touched on the question of school building. If the school-leaving age is to be raised in 1970, in our county, as in others, we must begin now to get the schools ready for that eventuality, and it is therefore essential that money is made available soon so we can get down to dealing with this problem.
I support the hon. Member for Glasgow, Shettleston (Sir M. Galpern) in his plea for more money for sport and amenities. One of the simplest ways in which local authorities can help is to


give a remission of 50 per cent. on rates to amateur sports clubs, grounds, and so on. At the moment it is entirely at the whim of a local authority whether a remission of rates is given. Granting such a remission would be a most constructive way of helping to provide amenities, and any additional grant which the Secretary of State could provide would serve a most useful purpose.

8 p.m.

Mr. Gregor Mackenzie: I am sure that most hon. Members welcome this Order. I am sure, too, that it will find a general welcome among members of local authorities throughout Scotland. Indeed, they will greet it almost with a sigh of relief.
The hon. Member for Dumfries (Mr. Monro) expressed concern about the increase in the Bank Rate. When I heard his comments, I could not but help recall what his party did when it was in power two years ago. When we inherited this balance of payments problem we tackled it with a measure of courage. I suggest that the hon. Member reads the circular issued to local authorities in 1961 by his own Front Bench and finds out about the cuts that they had to make because they did not believe it to be in the national interest to go ahead with any sort of programme of social development.
I therefore congratulate my right hon. Friend in dealing with local government matters as he has tonight, more so because I served for many years as a member of a local authority and I know that local authorities are playing an increasing part in national development in the sense that they are being asked to bear a greater burden of responsibility.
When I was a member of a local authority we were continually asked to take on a measure of responsibility for regional planning. It is part of the duty and obligation of the present Administration to put forward schemes of regional planning in Scotland, and I trust that my right hon. Friend will bear in mind, in respect of the figures that he has mentioned in relation to town planning, the experiences of local authorities which have to play a part in regional development.
We seek in regional development and planning the mobility of labour. If this is to be effective, however, the local authorities concerned must be given a

measure of direct assistance. We hope to have their co-operation in respect of the problem of overspill payments, and in regard to housing and roads, and I was delighted to hear my right hon. Friend say that he hoped to help local authorities in education.
During the first few weeks of my membership of the House I remember a little concern being expressed about the position of local authorities such as mine, in Lanarkshire, who have within their confines new towns and growing centres of population—part of what could be described as a regional plan. We welcome new towns and growing communities such as that of Bishopriggs, in Lanarkshire. At the same time, we are conscious of the problems that county councils have to face in the matter of school buildings.
These have had a very unfortunate effect on the older burghs of Lanarkshire, such as my own. We cannot get ahead with our school building programme as quickly as we want to. I am sure that the County of Lanark does its best within its limited resources. I therefore suggest that if we are really serious about our programme of regional planning and development an extra allowance must be given in the next few years to local authorities such as that which I have the pleasure to represent.
I hope that it will be done in the future, when we get rid of the notion of the general grant principle. I welcome—as I am sure most hon. Members do, especially those on this side of the House—the statement by my right hon. Friend that this may be one of the last Orders of this sort that he will place. This will in some measure assist in developing the scheme for modernising local government in Scotland. But if we are to have this programme of modernisation which is essential to the economic and social well-being of our country, we must have the co-operation of local authorities, and this can be effectively ensured only if people realise that we are in earnest from the financial point of view. This is something that we have not seen in the past, and I trust that my right hon. Friend will consider this proposal in future.
I now turn to the question of the care of our old people. Much comment has been made tonight about this subject. For some years I served on a local health


committee which dealt with this matter in quite a big way. We were always terribly restricted in the things which we could do. In one of my first speeches in the House I suggested that one means of getting over this problem was the construction of institutions known as consultative health centres for old people. I appeal to my hon. Friend the Joint Under-Secretary to consider this possibility, so that our old people may be treated in their own homes.

8.5 p.m.

Miss Harvie Anderson: Like the hon. Member for Rutherglen (Mr. Gregor Mackenzie) and my hon. Friend the Member for Dumfries (Mr. Monro), I have been more often on the receiving end of this grant than at its passing through this House. It is a pleasure to hear the right hon. Gentleman, with his zeal and enthusiasm for Scotland and Scottish affairs, but it is interesting to note the degree to which the zeal and enthusiasm have been hampered in a few short weeks. It gives one pause to wonder how long this will continue, and to what extent.
He said that the sums with which we are dealing tonight have been increasing and that he welcomed this trend. It is the good government of the past years that has enabled these sums to increase. [HON. MEMBERS: "No."] Yes. Further-more, the right hon. Gentleman did not refer to the rather important fact that it was possible for these sums to increase annually at the same time that we were maintaining the value of the £. It will be interesting to discover—should the House have the misfortune of hearing the right hon. Gentleman present another Order of this kind, be it in tonight's form or in a different form—whether the same will be true then. These matters must be very much in the minds of those whose responsibility rests with the presentation of the Order.

Mr. Ross: The hon. Lady will be aware that her party maintained the value of the £ so well and so stably that every year for five years we had to introduce an increase Order to make up for the rises in costs, prices, remunerations, salaries and all the rest. She had better think again about that.

Miss Anderson: If the right hon. Gentleman will bear with me he will

discover that I am coming to that exact point, very shortly. It is within my recollection that the last devaluation of the £ did not take place under a Government of which hon. Members of the present Opposition were part. My point has been made, and appears to have struck home.
My next point concerns the agreement which the right hon. Gentleman claims to have arrived at with the local authorities. I thought that he was rather rash, in the same part of his speech, to go on to talk about what had been possible with a majority of four in seven weeks. It flashed through my mind, that it was a shortish time in which to get on terms with local authorities. It occurred to me that some omnibus arrangement may have been made whereby it was possible to put forward this grant Order at the requisite time. Although I sympathise with the right hon. Gentleman in this matter, I hope that he does not progress too fast and assume that all local authorities are highly satisfied with the position.
That leads me to a constituency point, which has been touched upon by the hon. Member for Rutherglen, namely, the fact that those constituencies which have new developments of a considerable size in their areas, or which have overspill agreements, are at some disadvantage, especially in education, in which respect they have special schooling problems and special alterations of priorities to consider, some of which are inevitable. I hope that these difficulties will be kept in the forefront of the right hon. Gentleman's mind. Perhaps the Joint Under-Secretary will make reference to this point and assure us that it is very much in the mind of the Government. I do not think that any of us will wish to see new areas or towns being developed without certain priorities being given for schooling. At the same time, this situation promotes problems for the older-established communities, as the hon. Member for Rutherglen pointed out.
As I understand it, the increase which this Order shows reveals one or two weaknesses. First, it seems to me that the anticipated increase paid by the Order is likely to be less than the percentage increase for which the local authorities, or some of them, are budgeting. If we take our largest city as an example and


look at the rate of increase, we find that there are two facets. Obviously, this is a rate of increase on the present commitments plus the additional commitments which the right hon. Gentleman said were also desirable.
I scarcely think, then, that, overall, the increase matches this proposition. I am sure we shall hear more on this account from the local authorities. This, of course, presupposes that costs are held at a reasonable rate and, frankly, I do not think that I am the only hon. Member who has grave doubts about whether the Government will be able to hold costs to the extent that they sometimes envisage.
Where we are considering long-term propositions such as this it is as well to remember that we do so on the basis of costs being held at a reasonable rate. While I am sure that the Joint Under-Secretary of State will give us the utmost reassurances that this will be done, I look forward to the day, not far hence, when I shall have supporting facts and evidence to question whether this has been successful. These are two facets of the size of the grant which it is very important to remember.
Reference has been made to the Public Works Loan Board and the part which it can play—and therefore, of course, the part which interest rates generally play—in local authority exercises of all kinds. I think I am right in saying that the largest city in Scotland used the Public Works Loan Board for only some 20 per cent. of its total borrowing. It does not seem to me, therefore, that in respect of certain authorities it will be very effective if this great promise of the Government should come to anything. Quite a number of Government promises have not come to anything, but there is always the hope that in time they may. It is therefore worthy of note that in the largest city in Scotland only 20 per cent. of the total borrowing was done from the Public Works Loan Board. I scarcely think that this would have——

Mr. Archie Manuel: The hon. Lady cannot get away with this. She knows the game she is playing as well as do other hon. Members. She knows that during the period when the party opposite were in Government local authorities were not allowed to borrow

from the Public Works Loan Board when they could get money from outside sources—from the friends of the hon. Lady who were supporters of the Tory Party. Only recently, because of intense agitation from hon. Members on this side of the House, have the shackles been slackened in order to enable local authorities to exercise their borrowing powers in that way.

Miss Anderson: I am anxious lest hon. Members opposite, who now have certain responsibilities, are not aware of the game which they are playing, or how to play it.

Mr. Manuel: The Government have been in office only seven weeks.

Miss Anderson: Yes, I said that there is still hope. So far as the Public Works Loan Board is concerned, that is not the point. Any amelioration of the interest rate in this respect will make little difference to local authorities. That is the point which I wish to make.
Finally, with regard to the educational programme, the hon. Member for Glasgow, Shettleston (Sir M. Galpern) has long been an opponent of the block grant system. I have argued this both in this Chamber and elsewhere. Tonight the hon. Member said that one of the advantages in having a system which was more definite was that the local authorities could administer the grant according to their enlighened views. As I understand it, one of the difficulties is that people differ in their interpretation of what is an enlightened view.
I think that it is worth looking at the facts and figures for the great City of Glasgow. I very much doubt whether there is a single hon. Member present who could claim that the enlightened views in certain respects, particularly in housing, in Glasgow, were, in fact, "enlightened". It is worth remembering in a debate such as this, because it is relevant, that many hon. Members are not eager to pursue this point too far. The right hon. Gentleman used the quotation—"mine inheritance is small." I believe that the maxim on which most Scots were reared was that it is not the inheritance that matters, but what one makes of it, and I shall watch the outcome with interest.

8.17 p.m.

Mr. Gordon Campbell: I do not wish to make too much of this point, but we have not had much time to study these Orders. I mention this because hon. and right hon. Gentlemen opposite will recall the occasions on which they have made complaints about Orders concerning which more notice was given than the six days which we have had to study these orders. It looks as though I have taken over the rôle which was taken in the earlier debate by the hon. Member for Widnes (Mr. MacColl). I have had to do some work with the sliderule over the weekend in order to get abreast of the figures. One must always have a check. One method is checked by another and we were told in the earlier debate that even the computer has to be checked.
The increase Order should be the result of the normal consultations with local authorities about the consideration of increased costs. My hon. Friend the Member for Renfrew, East (Miss Harvie Anderson) has expressed doubts whether the figure in the Order represents those increased costs. No doubt the Joint Under-Secretary will reply to that point. I wish to pass on to the General Grant Order for the two years in question.
I am glad to see that in that Order there is the £1 million which was the equivalent of the English Measure, the Rating (Interim Relief) Act of 1964. As the Minister said, my right hon. Friend the Member for Argyll (Mr. Noble), who was then Secretary of State, entered into this commitment as the equivalent of the rating relief Measure for England and Wales. I was glad to note that the right hon. Gentleman said he thought that local authorities would welcome this extra £1 million. I believe that in Scotland it will now be recognised that this is a better bargain and a more convenient way to receive this assistance than the complex rating relief Act, and so we welcome that provision.
The right hon. Gentleman said that the general review of local authority expenditure was now taking place involving also the question of how the burden should be borne as between ratepayer and taxpayer. Presumably, this is the review which we started when we were in Government. If so, I am glad to have confirmation that this is being

continued. In the meantime, the Government appear to be continuing the general grant system for these two years in the same way as we did. The right hon. Gentleman explained why he was doing it. We approve both the continuation of the review that we started and the right hon. Gentleman's continuance of the general grant system on this occasion.
The Secretary of State made it clear that this might be the last General Grant Order of this kind that he would introduce if still in office in two years' time. He explained that in order to make any changes it was necessary to continue this review and to introduce legislation. My hon. Friend the Member for Aberdeenshire, West (Mr. Hendry) has pointed to a passage in page 20 of the pre-election publication "Signposts for Scotland", but I want to quote from page 13 of the Labour Party's manifesto which states:
… we shall seek to give early relief to ratepayers by transferring a larger part of the burden of public expenditure from the local authorities to the Exchequer.
The words "early relief" are used. Those who wrote that manifesto do not appear to have been apprised of the consideration that the right hon. Gentleman has mentioned—the review and the need for legislation, and the fact that all this would take time. A large number of people in Scotland may well have been misled by this pre-election promise into thinking that there was to be immediate relief for ratepayers in Scotland.
If the right hon. Gentleman had intended to do something quickly, I cannot see that there was anything to stop him from changing the percentage figure. That would have been a quick and easy way to carry out this early relief. What I point out, however, is the inconsistency between what was said before the election, and the impression that it may well have given to members of the electorate who are not fully versed in all these complications, and what is now actually happening——

Mr. Manuel: But would the hon. Gentleman consider that the Government, whether they have a large or a small majority, are returned for a five-year period, and could go for four or four-and-a-half years? What would he consider early in that connection? Eighteen months? Two years?

Mr. Campbell: This General Grant Order covers two years, and if the present Government had intended to give early relief they could have altered the percentage now as between the Exchequer and the local authorities. I do not suggest that that would have been a good thing—it is not something that we suggested—but it was available to him. I point out the inconsistency between what was held out to electors in Scotland beforehand and what has now happened.
Does the Under-Secretary of State estimate that for two years it will not be necessary for rates in general in Scotland to be increased? In the earlier debate on the English equivalent Order, my hon. Friend the Member for the City of Chester (Mr. Temple) calculated that on this basis the rates in England and Wales would probably have to go up by about 7 per cent. Can the hon. Gentleman make any estimate of the same kind?
The right hon. Gentleman also referred to the extra £2 million that is unallotted and contained in the estimate of expenditure. I believe, as did my hon. Friends in the debate on the English Order, that there is probably more to this than was contained in the right hon. Gentleman's explanation. My experience is that it does not often happen that the Treasury says, "Let us add another £2 million—the local authorities may have forgotten some items." That seems to me to be somewhat improbable. The version given by my hon. Friend in the English debate was that the figure there had been lopped off the first year and put on the second year. I shall be glad to have rather more explanation of that point.
The formula for the distribution of general grant is in Schedule 2 of the Local Government and Miscellaneous Financial Provisions (Scotland) Act, 1958, but as that Act is also mentioned in the right hon. Gentleman's Explanatory Note I shall seize the opportunity to express the hope that the formula will itself come under review. When we were in office we had hoped that there would be an opportunity in the next year or two to look again at the formula for distribution among local authorities, in order to see whether there was any way of mitigating the feeling of unfairness that some local authorities have. I recognise, having grappled with the problem myself, that

it is different to find a formula that suits every local authority——

Mr. Deputy-Speaker (Sir Samuel Storey): Order. I do not think that the hon. Gentleman can pursue this line of debate. To speak on the principle of the grant is out of order in this debate.

Mr. Campbell: Then I shall not pursue that point any further.
My hon. Friend the Member for Aberdeenshire, West referred to the important question of school building, as did the hon. Member for Glasgow, Shettleston (Sir M. Galpern). I disagree here with the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie), who seemed to think that local authorities were entirely satisfied on this matter. My impression is that some local authorities in the north of Scotland, and elsewhere—notably Glasgow, as the hon. Member said—because they have had large and ambitious programmes for school building for the next three years or so, had been somewhat disappointed when the previous Government had to make allocations which meant that in some cases the figures were less than those that have been estimated and applied for. This was because these were very large programmes compared with previous programmes that had been embarked upon, and their sheer size, in some cases, compared with the previous programmes, meant that there had to be some reallocation of the money available.
That was accepted by the right hon. Gentleman in opening this debate. That was when he was talking about education, but this meant some disappointment among those education authorities. That disappointment was played upon during the summer by supporters of hon. Members opposite. They gave the impression that if the Labour Party won the election these allocations would be increased and what were incorrectly called "cuts" would be restored. This clearly is not happening. In reply to a Question last week we were told that this was not happening and the excuse given was the balance of payments situation.
There is no doubt that there has been a balance of payments situation, but I must make clear that the 7 per cent. Bank Rate and the credit squeeze are the result of this Government's actions since then—notably the Budget and the unusual procedure of publicly formulating the next Budget, also the lack of confidence


abroad which the Government's handling of the situation and their financing of these Measures has caused.
I disagree with the hon. Member for Rutherglen (Mr. Gregor Mackenzie) in saying that this was a situation which was inherited. The balance of payments situation was inherited, but the situation of 7 per cent. Bank Rate and the credit squeeze with its effects on programmes and interest rates is entirely the result of the actions of this Government in the last two or three weeks.

8.30 p.m.

The Under-Secretary of State for Scotland (Dr. J. Dickson Mabon): I am surprised at the ending of the speech of the hon. Member for Moray and Nairn (Mr. G. Campbell). Up to now the debate has been remarkably good-tempered, and free from party bias, but those last remarks of the hon. Member can hardly remain unacknowledged.
We inherited an extraordinary economic situation. When Ministers took up their posts on 16th October—61 days ago, a little more than eight weeks, which gives us 12 years and 44 weeks to go before we would have a record such as hon. Members opposite—we found the country in an alarming state. That reflected itself in all activities of Ministers in relation to plans and the natural process of administration going on in the Department. One thing we found was that negotiations by the officials at the Scottish Office, which had begun in the summer, were coming to the stage when Ministers with knowledge of the position within the Government and appreciation of the economic situation had to meet the local authorities and come to a final agreement with them on the Increase Order and the subsequent Order which we are now discussing.
In the light of that it is quite remarkable that local authorities should show themselves so fully appreciative of the difficulties which the new Government faced. They were more fair than the hon. Member and his hon. Friends in making criticisms. The testimony of their fairness lies in the fact that very few hon. Members opposite can take from their pockets letters of protest from local authorities or local authority associations saying that these arrangements are quite outrageous. As my hon. Friend the Mem-

ber for Rutherglen (Mr. Gregor Mackenzie) said so well, we are facing a situation today, in terms of the balance of payments crisis, which is even more serious than the difficulties faced in 1961.

Mr. Ross: Much more.

Dr. Mabon: Much more serious, £500 million in 1961 and £800 million this year. That is what we have inherited.
If we look back to 1961 and consider what the then Government did, we see that if we did the same it would not be an Order like this that we should be inviting the House to approve, but we would be imposing quite heavy programmes on local authorities. It may refresh the memory of the hon. Member for Moray and Nairn to return to that circular. On another occasion I shall come armed with that circular and read some of the more of its agonising parts.
One of the distortions is on the question of overspill and its effect on the school building programmes of receiving counties. The hon. Lady the Member for Renfrew, East (Miss Harvie Anderson) joined my hon. Friend the Member for Paisley (Mr. John Robertson), the former Member for West Renfrewshire, now Viscount Muirshiel, and myself in helping the county to make representations on this position. That was way back in 1963. It was not taken as a party matter, but as a fair matter of public concern that overspill agreements distorted the school building programme and the whole educational estimate of a county. Having succeeded to office, we found that nothing at all had been done to deal with that problem.
Is it right or fair that eight weeks after taking office we should be criticised for not having tackled this matter when we have so many things in hand? Hon. Members opposite cannot have it both ways. They criticised us for "instant government"—that is their parrot cry. Yet the other horse that they ride at the same time is that we are not acting quickly enough. It is quite wrong to parade these contradictory arguments and expect either the House or the country to believe them. The reason why the country has been more fair minded than the Tory Party and that the Government, despite all the difficulties that we are facing, is as popular, indeed more popular with the public—[HON. MEMBERS: "Oh."] That is


true. All the Conservative newspapers believe this to be so.
The reason why we are more popular is that the country is fairly assessing the Government in a difficult situation and acting well in the face of all these difficulties.

Miss Harvie Anderson: Is the hon. Gentleman referring to the 8 per cent. drop in the Government's popularity as announced this morning?

Dr. Mabon: The hon. Lady is stretched to try to find figures. There are other pelts than that one, and even by that one poll we still win. But I am a long way from the Order and I was provoked into this by the concluding comments of the hon. Gentleman.

Mr. G. Campbell: I was not criticising the Government for acting too soon. Some of the things that they have done are the wrong things. I was criticising that they were not doing what they appeared before the election to say they would do.

Dr. Mabon: This is another point on which the hon. Member must be fair. My hon. Friend the Member for Central Ayrshire (Mr. Manuel) asked a very good question when the hon. Member was criticising us on the matter of the manifesto. How long does a Minister, and he has been a Minister, regard the phrase of early relief? Does he mean eight weeks?

Mr. G. Campbell: Less than two years.

Dr. Mabon: If the hon. Member says less than two years that gives us until 1966 before he can complain that we have made promises to the public and not fulfilled them.

Mr. G. Campbell: This particular Order lasts for two years.

Dr. Mabon: The hon. Gentleman is having great difficulty in following the argument.
We are obliged by Statute, which we cannot change, to introduce these Orders in two-yearly periods. We are doing this. We have already made reservations to the local authorities in relation to the second year. That is why, if the hon. Member had listened more intently to my right hon. Friend the Minister of

Housing and Local Government—as did the hon. Member for Ross and Cromarty, who has sat here throughout the whole of the English and Scottish debates, and I commend him for that—he would have recognised right away that the reason for the second year's difference was to deal with the problems that may arise in that second year of the General Grant Order.
The hon. Member said that he could not understand the Treasury giving more to local authorities, which they have not asked for, and before which the agreement had been made. This is very true in Scotland. Our local authorities had agreed to accept £2 million less than we are asking the House tonight to agree to. The reason for that is because we recognise the difficulties of local authorities in 1966–67. It will be a year, I hope of great change. The Government hope in that year to see the fruition of many of their activities which, at present, we cannot bring to public light and examination because they are matters of departmental concern and must be resolved not only in the light of policy commitments, but also in the light of organisational and administrative problems.
I turn to some of the specific items, and I will gladly give way to hon. Members opposite later. I turn to some of the criticisms offered by the hon. Member for Aberdeenshire, West (Mr. Hendry). He said that the Order represented, in respect of education only a 7 per cent. growth. In fact, the areas of growth differ considerably. I am told that 4 per cent. will be in primary and secondary schools, 15 per cent. on further education and 15 per cent. on loan charges. This is the important point in his argument which, I think, he missed. I was surprised at him regarding 7 per cent. as a mere bagatelle. When my right hon. Friend said that he meant it in a sarcastic way. Seven million pounds is a lot of money, certainly by Scottish standards. I would not regard £7 million as a mere bagatelle.
The hon. Member seemed to be reflecting on these figures as if they were the principal figures of school building, whereas they are not. The matters which we are concerned about are in respect of loan charges. In 1962–63 loan charges on educational building under the general


grant came to £8·.65 million. In 1963–64, they came to £9·8 million. In 1964–65, they will come to £11·59 million; that is, with the adjustment we shall make tonight, I hope. In the General Grant Order for the two years 1965–66 they will be £12·9 million. In 1966–67, they will be £14·3 million.
The hon. Gentleman went on further to criticise us—this was reflected in the speech of the hon. Member for Moray and Nairn—for bullying—"browbeating" was the word—the local authorities into accepting these figures. May I tell the hon. Gentleman that the only argument, if he likes to call it an argument, between all the delegates representing all the local authorities and myself, having the privilege of representing my right hon. Friend and the Government, on loan charges on educational building for 1965–66 was as between £12·9 million and £13 million. It was an argument over £100,000. Our second argument for 1966–67 was between £14·3 million and £14·5 million, a difference of £200,000.
I admit that we did not resolve that, but in the final analysis we resolved all the other outstanding problems and rounded the figures up to a figure acceptable to the local authorities. I know that this is rather unusual, but I cannot let the comment about browbeating, even if it were made humorously, pass without some defence of the officials concerned and, indeed, of myself.
In the past, as the hon. Member for Moray and Nairn can confirm, local authorities have never been reluctant to upbraid the elected representative, the Minister, if they have not got a reasonable response from the officials. The hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) mentioned the description "bonnie fechters". This applies not only to our councillors from the Highlands, but to councillors from all over Scotland. Although there might be differences in fighting qualities among Scotsmen, nevertheless they are all good fighters when it comes to fighting the Department. I will not bring any officials before us tonight to testify to this, but they can show their wounds from fighting this battle. There is a statutory obligation on the Minister to meet the local authorities so that they can make their complaints, if there are any, and they can be fully ventilated.
I received the most cordial reception. After much hard-headed discussion, we were able to reach agreement. I have a minute here. I agree that it is not approved by the local authority associations, but it is nevertheless a valid minute. I did not prepare it. Item 16 says this:
Dr. Macfarlane thanked the Minister for the patient and courteous hearing which he had accorded to them. He wished to take the opportunity to express on behalf of the County Councils' Association their good wishes for a successful term of office. Ex-Provost Smyth and Treasurer John S. Clark expressed similar good wishes to Dr. Mabon on behalf of the Convention of Royal Burghs and the Counties of Cities Association respectively.
I conveyed these good wishes to the Secretary of State, and perhaps that prompted him to provide £2 million more for the second year, about which the local authorities were informed at a later stage, much to their surprise and delight, I am sure.

Mr. Rankin: So my hon. Friend has convinced every one of us that he did not need to browbeat the local authorities into accepting £2 million more than they asked for.

Dr. Mabon: As my right hon. Friend the Secretary of State said, they were wreathed in smiles. I have no doubt that their smiles got bigger with the knowledge that the extra £2 million has been added for the second year.

Mr. G. Campbell: As the hon. Gentleman has quoted from that document, is it possible for the whole of it to be tabled and made available?

Dr. Mabon: As a matter of fact, it should now be in the hands of every local authority, and I strongly suggest to the hon. Gentleman, who must be in good relations with local authorities, that he should acquire this and read it. I admit that, in practice, there ought to be common documents shared by both sides. I hope that a Labour Government would never for one moment behave like the previous Government in that regard. This is a common document in relation to local authorities.
Let me pass, however, to the question of the raising of the school-leaving age. I repeat that we had just come into office and because of that we find that little has been done. Some preparation is going on, but that preparation will


have to be speeded up. I am assured that relatively little building work will be done before 1967. That is hardly our responsibility. It takes a long time to prepare and develop plans for building schools, the letting of contracts and all the rest, but the preliminary work is being speeded and I can assure the House that this, in time, will be part of our programme.
It may cover the second year of the grant and it may not. I cannot say at this stage, but it is a matter which concerns the Department and it will be pushed ahead at all speed.

Mr. Hendry: Is the hon. Gentleman suggesting that the Prime Minister cannot really produce a new Britain in 100 days?

Dr. Mabon: Our 100 days will be much more fruitful than 100 years under hon. Members opposite.
My hon. Friend the Member for Glasgow, Govan (Mr. Rankin) referred to the need to encourage day-release instead of evening classes. This is part of the Government's programme. It has been going on at the rate of 10 per cent. per annum and we hope to speed it up to 20 per cent., either next year or in the second year. That is not bad for the first 61 days. My hon. Friend commented on Govan High School. I have no intention of intervening in representations between him and my right hon. Friend. All I know is that if he keeps pressing hard enough he might succeed.
My hon. Friend the Member for Glasgow, Shettleston (Sir M. Galpern), who was kind enough, with the hon. Member for Ross and Cromarty, among others, to welcome these provisions in the Order and the statement made by my right hon. Friend that this may be among the last of these Orders, asked for some information about the registration of electors, about planning and about physical training. On the question of the provision for the registration of electors, which is one of the items which seems to fluctuate, in this case between £321,000 and £335,000 in the final year, I am told that in 1963–64, and to a lesser extent in 1964–65, expenditure was high because Glasgow and Edinburgh were buying machinery to print their registers. In the two-year

grant period ahead which we do not consider, any printing equipment will be bought and, therefore, there is a drop in the estimates.
I am grateful to my hon. Friend the Member for Shettleston for his reference to planning. There is an appreciable difference between £301,000 in 1963–64 and £800,000 in 1966–67. This is because the rehabilitation area programme, which is very much a part of this operation, is being speeded up by the Government. In opposition we on this side criticised lack of progress in this matter very severely. We now intend to pursue it as fast as we can in the years ahead because one of the disfiguring features in Scotland is the bings and derelict lands which pock-mark towns and villages in the counties of Scotland, particularly in the central belt. This provision is quite apart from Board of Trade help. We are intending to do this with the encouragement of the local authorities.
My hon. Friend the Member for Shettleston had some critical remarks to make about the provisions of physical training. In the context that may have been fair, but we have to consider that these provision relate to adult physical training. I am told that in 1965–66 expenditure will be £1·02 million and in 1966–67 £1·13 million, which compares favourably with expenditure in 1964–65 of £900,000 for youth service and other forms of social and recreational activity.

Sir M. Galpern: What I am more concerned about—I am sure that my hon. Friend shares my concern—is that we should be spending more money on our housing schemes in the provision of playing fields, which I think is a responsibility of the Government, not of the education authority.

Dr. Mabon: My hon. Friend raises the interesting question of what is the responsibility of a local authority and what is the responsibility of the State. This is very much a matter which is being considered in the local government review and by other agencies of Government inquiry. I shall return to it in a moment.
The hon. Member for Dumfries (Mr. Monro) asked about consultation particularly as regards the review and


with reference not only to local government representatives and officials, but central Government officials. I gave an assurance about this to the local government representatives at the meeting on 27th November. The hon. Gentleman made a very good point, and I agree very much that local officials are very well informed about developments and can offer a good deal of advice even to the central Government.
At times, the central Government tends to think of itself as a superior sort of body employing superior officials, but this is hardly fair to local government officials who are at least as well informed as some Central Government officials. We shall encourage as much as we can the flow of information between the two sets of officials. We have already had informal consultations with different associations of officials.
The hon. Gentleman mentioned the treasurers. The municipal treasurers are in correspondence with us on a number of points about the rate burden, and so on, and this is a matter which will be taken into account in the review. Already, even though we have no basis of review to discuss, we are taking this matter up on the basis of existing facts as they are known to us, and we are going this not from, so to speak, the external standpoint of Scotland vis-à-vis England, but from the internal standpoint within Scotland as well. It is a very important exercise.
The hon. Member for Moray and Nairn and one or two other hon. Members have been concerned about the position of small local authorities. Indeed, the hon. Member for Moray and Nairn rather bravely tried to introduce the subject at the end of his speech. We are thinking closely about it, although it does not come within the context of this particular Order.
My right hon. Friend the Chancellor of the Exchequer dealt with the question of the Public Works Loan Board in his statement on 23rd November and said that the Government were considering it actively. I believe that my right hon. Friend will be making a statement about it in the near future and I should not like to anticipate what he will have to say. Suffice it to say, from our point of view, that we have taken the matter

fully into account, including the temporary 7 per cent. Bank Rate, which we hope will not in its effects embarrass local authorities in the succeeding two years. However, good Government though we are, we cannot anticipate everything. I hope that the House will await the Chancellor's statement and see how we go on from there.
My hon. Friend the Member for Rutherglen made some very kind remarks about several provisions in the Order and was very wise, if I may say so, in drawing attention to the provision for old folk's homes. I was glad that he spoke about the successful social experiment in Rutherglen. I should like to see more local authorities adopting this kind of approach to the provision of old folk's homes and the provision of services to old folk as such who live in their own homes. I say the same about the mental welfare services, both community care and after-care, which deserve to be expanded. Again, we have tried to make provision for this particularly in the second year.
The hon. Lady the Member for Renfrew, East (Miss Harvie Anderson) struggled manfully to find reasons to attack us on this Order, and I am glad that she failed. It was rather sad to hear her challenge us about the value of money. The external devaluation of the £ in 1949 is not closely relevant to this Order, and it is probably less important than the internal devaluation of the £ between 1951 and 1964, which amounted to about one-third of its value. This was to some extent, perhaps even to a large extent, the reason why General Grant (Increase) Orders had to be introduced with a frequency which her Government did not really intend. I cannot, despite what she said, pledge that the £ will remain its 20s. value as at 15th October, 1964, for the next two or 20 years.
When I heard the hon. Lady's argument, I thought that she was rather like Eliza Doolittle, especially when she threatened that she would find facts in the future that would embarrass us. It reminded me of Eliza saying, "Just you wait and see, 'enry' iggins". We will wait and see, as Mr. Asquith said. The hon. Lady tried desperately to make an attacking speech, but, unfortunately, had not the facts to support it.

Mr. G. Campbell: Surely the hon. Gentleman agrees that, under both these Orders, there will be increases in wages and salaries. Indeed, we all hope that they will be increased at a time when the value of money remains stable. It is, therefore, not quite fair to my hon. Friend to say that the Orders are entirely due to the fall in the value of money. The value of money fell a great deal more between 1945 and 1951 than during any similar period of Conservative Government.

Dr. Mahon: That is arguable, but I admit that the hon. Gentleman is making a fair point. One has to take account of rises in salaries and wages, and so on. I hope that I phrased my remarks in such a way as to show that this was not entirely due to the fall in the value of money. But I did not introduce this element. The hon. Lady did. I was merely replying to her. I do not want to enter into mutual remonstrations.

Miss Harvie Anderson: I referred to costs. The hon. Gentleman has tipped this matter to suit himself.

Dr. Mahon: The hon. Lady does me more than justice. I listened carefully to what she says, and, indeed, wrote it down. In HANSARD tomorrow she will find that she hit us for six, so she may think, on the question of the devaluation of the £.
I hope that the hon. Member for Moray and Nairn makes many more winding-up speeches from the Front Bench opposite in the years to come, because he is always very good tempered and has great difficulty in working up the party ire which is necessary for such occasions. I agree, however, that it is difficult to do that when the Government have such a good case. We are promoting a General Grant (Increase) Order which is welcomed by the local authorities and about which there is no quarrel. The General Grant Order is also accepted by the local authorities, who are pleased that the promise made by a Conservative Government in December, 1963, should be fulfilled by a Labour Government in December, 1964, and also that the Government should be able, in the second year of the grant, to find £2 million more—£1·2 million of it Treasury money—to be included in these Orders.
That is an achievement and I am grateful to the House for the good hearing that we have had.

Question put and agreed to.

Resolved,

That the General Grant (Scotland) Order 1964, dated 8th December 1964, a copy of which was laid before this House on 10th December, be approved.

General Grant (Increase) (Scotland) Order 1964, dated 3rd December 1964 [copy laid before the House, 9th December] approved.—[Mr. Ross.]

NATIONAL ASSISTANCE (INCREASED SCALES)

9.0 p.m.

The Joint Parliamentary Secretary to the Ministry of Pensions and National Insurance (Mr. Norman Pentland): I beg to move,
That the National Assistance (Determination of Need) Amendment Regulations, 1964, a draft of which was laid before this House on 2nd December, be approved.
After listening to the fluent and exciting speech of my hon. Friend the Under-Secretary of State for Scotland, I feel that I should warn the House that during my speech—or, to be honest, my factual statement—I shall be referring to a wide range of figures and percentages. I am sorry about this, but it is necessary if the proposals embodied in the Regulations are to be fully understood by hon. Members.
These Regulations represent a very substantial improvement in National Assistance standards. The increases in the main scale rates represent about a 20 per cent. increase on current rates. This is the largest increase since 1948, whether taken in terms of cash or as a percentage increase. The proposed new rates represent an increase of 217 per cent. for single households and 214 per cent. for married couples over the original 1948 rates. That has to be considered against an increase of 80 per cent. in the index of retail prices up to October, 1964, and against a 106 per cent. increase in the index of wage rates for the period July, 1948, to August, 1964, and against an increase of 163 per cent. in average earnings of adult manual workers in the period July, 1948, to August, 1964.
The total cost of these improvements will be £23 million in a full year. This


is a net figure reached after taking into account the proposed increases in retirement pension and other benefits. If it were not for the increases in pensions and other National Insurance benefits, the cost to the National Assistance Board would be £74 million. This is the estimated cost for existing cases, those now being paid. The ultimate cost will undoubtedly be higher, because there will inevitably be an increase in the number of people eligible for allowances from the Board as a result of the increases which we are now proposing in the scale rates. Therefore, a number of factors have to be taken into account in considering how many additional people will be receiving allowances from the Board after the increased rates have been brought into force. It is not possible at this moment to make any reliable estimate of what the number will be.
The increases will come into effect at the same time as those for retirement pensions. This has been the practice when both National Assistance and National Insurance rates have been increased. In recent years, both sides of the House have considered it very desirable that the increases should operate at the same time in order to avoid the confusion and misunderstandings which occur if National Assistance increases operate before National Insurance increases. We all know that when this happens, or if it happens, National Assistance allowances which have been increased have to be reduced again after a short time for those receiving the National Insurance benefits. Those people would naturally feel disappointed and frustrated when they found that they received no advantage, or less than the full advantage, from National Insurance increases.
In other words, in trade union jargon which my trade union colleagues know full well, what has happened in the past have been occasions when the people concerned have had what is known as a "Paddy's rise"—they have had it in one hand but had it taken away from the other. On this occasion, the proposed increases are being given mainly for the purpose of improving National Assistance standards. That reinforces what I have said about the dates on which the increases are to come into effect. I must

make it clear that the Government and the Board are satisfied that it is right that the effective dates of National Assistance and National Insurance increases should be the same, in other words, that they should be synchronised. In the meantime, however, as my right hon. Friend the Minister has already announced, the Board is taking special steps, pending the operation of the increases, to ensure that National Assistance recipients, particularly old people, do not suffer hardship during the winter. I understand that that decision has already taken effect in many parts of the country.
I should like to say a word or two about the various scale rates. I have already mentioned the amounts of the increases proposed in the main rates. As I have said, the rate for the single householder, which includes people living alone, will go up by 12s. 6d. —from £3 3s. 6d. to £3 16. My information is that the majority of allowances are assessed at this rate. There were about 1,190,000 single householders out of 1,925,000 people on assistance at the end of September, 1964. Of these single householders, about 925,000 were old people.
The rate for the married couple will go up by 21s—from £5 4s. 6d. to £6 5s. 6d. There were about 405,000 married couples receiving assistance at the end of September, 1964. About 220,000 of them were old people.
The rate for a non-householder aged 21 years or over will go up by 12s. 6d. —from £2 15s. to £3 7s. 6d. As the House will be aware, "non-householder" is the term used to describe a person who is not himself a householder but is living in the household of another person. We are all aware of the typical cases in this category—old people living with their married sons and daughters and younger single people living with their parents. In December, 1963, there were 304,000 weekly allowances assessed at the "non-householder" rate.
I come to the rates for young people aged between 18 and 20 and 16 and 17 years of age. The rate for the young person aged between 18 and 20 will go up by 8s. 6d. to £2 11s. 6d. The rate for young people between 16 and 17 years of age will go up by 7s. 6d. to £2 4s. 6d. The increase represents about 20 per cent.


over the current rates. Relatively few allowances are assessed by reference to those rates. I am informed that in all there were 30,000 at the end of 1963.
The rates for children will go up by 3s. to £1 2s. 6d. for those under five years; by 4s. to £1 7s. for those from five to ten years and by 5s. 6d. to £1 13s. 6d. for those from 11 to 15 years. There were about 529,000 children provided for in weekly allowances in December, 1963, belonging to 228,000 families.
I come now to the special rates. These will go up by the same amounts as for the corresponding categories under the ordinary scale: that is, by 12s. 6d. for single people over the age of 21, by 21s. for married couples and by 8s. 6d. for adolescents from the ages of 18 to 20 and 7s. 6d, for adolescents aged 16 and 17. These increases retain the differential in favour of the blind and the tuberculous at its present amount of £1 4s. 6d.
The scale rate is, of course, only one of the factors which is taken into account in assessing a National Assistance allowance. An allowance for rent may be added, for example. In nearly every case, it is the actual amount of rent paid. The amount added varies greatly between one case and another, but at the end of September, 1964, the average addition for a single person was £1 6s. 2d. and for a married couple £1 9s. 9d. Therefore, a single householder who lives alone and pays the average rent of £1 6s. 2d. would have his income brought up to at least £5 2s. A married couple paying an average rent of £1 9s. 9d. would have their income brought up to at least £7 15s. 6d.
The level to which the income would be brought up would, of course, be higher for families with children. For example, in the case of a married couple with two children aged between 5 and 10, assuming a rent of £1 14s. 6d. a week, the figure would be at least £10 14s. a week. For a married couple with three children aged, respectively, under 5, between 5 and 10 and between 11 and 16 years of age, and paying a rent of £1 14s. 6d. a week the figure for the family would be at least £12 3s. a week. I say "at least" because all these amounts could well be higher since the Board makes special additions under its discretionary powers where special needs exist. Some recipients of allowances from the Board have other

income, part of which is disregarded, and this represents additional income.
As hon. Members will probably know, these special additions are an essential part of the National Assistance scheme. The amounts may range from a few shillings a week to substantial sums. For example, they may be only modest amounts for, say, laundry where expenses have to be met for that purpose, there might be an expensive special diet requiring an addition of, say, 20s. a week or still larger total amounts may be involved where the same person has a number of special needs.
At the end of 1963, discretionary additions for special needs were being given in over 51 per cent. of all weekly allowances and in over 60 per cent. of supplements to retirement pensions. The average amount was 8s. 10d. a week and the total cost about £23 million a year. In all, over 1 million persons were receiving discretionary additions from the National Assistance Board.
For the vast majority of persons who are receiving National Assistance supplements to retirement pensions and other long-term National Insurance benefits which will be increased on 29th March, the effect of the National Assistance increases will be to leave their supplements unchanged, that is, their total income will go up by the full amount of their benefit increases. This is in regard to the vast majority of people who will benefit under these proposals, but there will be exceptions, and I should like to give some examples of what these exceptions will be and how they occur.
First, families with dependant children will normally receive a small increase in their Assistance supplements as well as the National Insurance increases. This is because the National Assistance rates for children are going up by more than the benefit rates for children. Secondly, a few people will have a reduction in their Assistance supplements because the increase in benefits and pensions is more than the increase in the Assistance rates.
There are one or two other groups who will not benefit by the full amount of the Assistance increases. These include persons, of whom we are all aware, in Part III accommodation provided by a local authority, or in comparable accommodation, who are allowed a prescribed sum of pocket money week by week. There are also persons living as boarders,


paying an inclusive sum for board and lodging. Ordinarily they have their income brought up to a sum sufficient to meet the board and lodging charge, and provide a sum for personal expenses. Then there are unemployed persons whose normal earnings would be less than the amount of assistance which would otherwise be payable. That is the well-known "wage-stop" case.
I might also add that special temporary arrangements will be made under Schedule 7, paragraph 9, of the National Insurance Bill to ensure that increases in short-term National Insurance benefits, which will be payable at the end of January in accordance with that Bill, are disregarded for National Assistance purposes, except to the extent that they will be taken into account when the National Assistance increases come into operation, also on 29th March. Here again this will be done to ensure that the vast majority of recipients of short-term benefits get the full advantage of their benefit increases.
The House should recognise that the cost of this is pretty large, and I think it should be appreciated by hon. Members on both sides that this money is being made available at a time when the Government are having to watch their expenditure very carefully indeed. It shows that the Government are determined to look after the interests of the poorest people in our community. I therefore trust that the House will recognise that the proposals in these draft regulations are a measure of compassion on the part of the Government to meet the needs of the poorest people in our country. I hope that full approval will be given from both sides of the House for their implementation.

9.19 p.m.

Mr. James Dempsey: I rise to congratulate my right hon. Friend on having the courage to introduce Regulations which give such substantial increases to the neediest section of our community. It takes a great deal of courage to do this when one has regard to the economic mess which my right hon. Friend and the Government inherited not only abroad but at home, and it indicates that this is a Government of action when it comes to looking after the interests of the neediest section of the community.
The increases themselves indicate that the Government are determined to live up to their pledges to that section of our community and, in particular, our old folks. The plight of our old folk has been considered by committees, social research units, the medical profession and by all sections of our sociological service, and all of them are convinced that the old and the chronic sick are living well below the existence line.
It therefore seems to me that in taking this action my right hon. Friend and the Government are demonstrating that they recognise the facts about this section of the community. The increases are very substantial. They are second only to the famous increases of the first Labour Government. We should congratulate my right hon. Friend for introducing these proposals so energetically and for taking such firm measures, in spite of the economic situation which the Government inherited from the previous Tory Administration.
The Tory Government refused to synchronise increases in National Assistance rates with pension rates. That is the tragedy. Time after time, as HANSARD shows, our Tory predecessors actually reduced real National Assistance rates because they insisted that pension increases should not be matched by corresponding increases in National Assistance scales. Time after time we protested. Before I came to Parliament I was the Chairman of the Lanarkshire Advisory Committee on National Assistance, and I led a deputation to Edinburgh to meet the then Tory Minister of Pensions and National Insurance in order to protest at the further widening of the differentials between pension recipients and National Assistance recipients.
On many occasions we discovered that in the case of pensioners who required to have their meagre incomes supplemented by National Assistance not only did they receive no increase; in some cases their global incomes per week were less than the pension increase. It was because hundreds of thousands of our old souls were being treated in this parsimonious fashion that many of us argued that whenever we increased retirement pensions we should make corresponding increases in National Assistance scales.
That is why I welcome the action of the Government in ensuring that National


Assistance scales will be increased to correspond to the pensions increases. In this way we shall eliminate the previous anomaly, whereby an old soul may receive a pension increase, on the one hand, and have it taken off him in respect of National Assistance payments, on the other, receiving what we in the North refer to as an Irishman's rise. That was the penalty imposed by our Tory predecessors who ruled this country for 13 years. It was a shame and a disgrace, and we protested emphatically against it time after time.
We even sent to the then Tory Minister of Pensions chapter and verse about the anomalies which his Administration was creating. These representations were made not simply on behalf of the Labour and trade union movements; they were unanimous representations made on behalf of my committee, which represented all sections of the community. This was a miserable way in which to reward the old folks for their toil on behalf of the nation. That is why one finds it difficult to contain oneself when listening to speeches with crocodile tears from hon. Members opposite about the plight of the old folk.
We have consistently said that the welfare of the old people and the chronic sick is of the utmost importance. We have always argued that this section of the community is entitled to receive a great and expanding share of the gross national product. This is the generation to which we owe so much. I am glad that one of the first acts of this new Labour Administration was to recognise the plight in which these people live and to take the ambitious step of offering substantial increases of 21s. and 12s. 6d. respectively to help and protect them during times of economic adversity.

9.25 p.m.

Mr. Gordon Oakes: Like my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey), I wish to congratulate my right hon. Friend on her courage in bringing forward these increases. It demonstrates that this Government are vitally concerned about those most in need and determined that they shall receive help.
I should like information from my right hon. Friend regarding the vexed question of the wage stop. I know the difficulties inherent in this matter, that there could be people in receipt of

National Assistance who would be receiving more money than they could earn if they were employed. In a previous debate on this question, at the time of the last increase in February, my right hon. Friend had this problem well in mind. Those who are affected under the present scales will receive nothing through the increases. This is an anomalous position. It means that some people, usually people with large families, who do not receive anything more are at present in receipt of less than the subsistence rate. This problem is greater in the North. As I am sure my right hon. Friend will be aware, the further north one goes the less is the amount of the average wage and the greater the incidence of the wage stop.
There are those who are idle and shiftless and who would receive National Assistance while refusing to work. I am sure that the conduct of these people would not be supported by any hon. Member, and I suggest that they may be dealt with not by imposing a wage stop, which affects the welfare of many others in receipt of National Assistance, but by the exercise by my right hon. Friend of her powers under Section 51 of the principal Act, which contains measures to deal with people who refuse to maintain themselves and their families. Their actions bring the whole National Assistance system into disrepute, and I suggest that the Board should prosecute those who refuse to work and who are a burden on society. Other people are affected by their actions and have to suffer because of this iniquitous wage stop.
I am sure that my right hon. Friend is seized of the problem because she mentioned it in our previous debate on this subject, but perhaps she can tell us how many people are prosecuted under Section 51. These people are holding back increases for others on National Assistance who deserve them. I am particularly concerned about this because the wage stop always applies where there are a large number of children, and it is the children who might be hurt by the increases not being applied to those families.

9.30 p.m.

Mr. Charles Curran: I want to put a viewpoint different from that of the hon. Member for Bolton, West (Mr. Oakes) who urged more prosecutions. I believe that we need to


look at the wages stop principle much more attentively and sympathetically than he did.
The wages stop dates from 1948, and was invented by the Labour Party. It is contained in the Determination of Means Regulations, one of which says that if an applicant is required to register for employment as a condition of seeking Assistance, his weekly income must not exceed his net weekly earnings if he was employed full time in his normal occupation.
That means that the wages stop is applied to families where the husband is unemployed. It is not applied where the husband is sick. The principle is that a man should not be better off when out of work than when doing his normal job, and that if his unemployment benefit, National Assistance and family allowances add up to more than his regular rates of pay his National Assistance should be cut.
It is to that point that I want to direct the Minister's attention. Does she or does she not think it right that family allowances should be disregarded? Suppose we were to say, as we could, that the family allowances should be disregarded, would we not then be helping the people with large families who are now penalised by the wages stop? Would it not be better, instead of talking of prosecutions, as the hon. Member did, to exclude family allowances from the review that the Assistance Board makes of a man's income?
I have not the slightest objection to the wages stop being applied to people who do not have children. But I do not see why we should penalise a man by penalising his children. I suggest that the simple way to avoid that is just to exclude the family allowances. I agree that if we leave out family allowances we may allow a certain number of loafers, if that is the word to use about them, to get money that perhaps they ought not to have—people who would find themselves better off being idle than being at work. But the frank truth is that we cannot run National Assistance and make it do its proper job if we are to surround it with a barbed-wire fence to ensure that there is no cheating anywhere.
If National Assistance is to do the job it was created to do, which is to look after the poor, we must frankly recognise that there will be a certain amount of waste, a certain amount of fiddling and a certain amount of plain fraud. We have to put up with that, especially where children are involved. If we try to stop it by prosecutions, it is true that we shall penalise the loafer who is cheating, but we shall also be penalising the children, who are not.
I would therefore ask the Minister two questions. First, what would it cost to exclude family allowances altogether—from any calculations——

The Minister of Pensions and National Insurance (Miss Margaret Herbison): If I may interrupt the hon. Gentleman at this point, family allowances are not taken into account at all. The hon. Gentleman will understand that when a man is working he has the family allowances, or his wife has them, over and above, and they are not taken into account for National Assistance.

Mr. Curran: Do I understand the Minister to say that none of the social insurance benefits of any kind are taken into account?

Miss Herbison: The only one taken into account is the family allowance so far as concerns the wages stop.

Mr. Curran: Will the right hon. Lady tell us whether she is prepared to review the wages stop so as not to penalise the man with a large family and to recognise that, as we are doing it now, we are clamping down on the loafer at the expense of his children? I ask whether instead of urging prosecutions she can so rearrange the workings of the National Assistance that, if necessary—I am quite blunt about this—we can put up with a certain amount of cheating and fiddling rather than penalise the man with a large family and thereby penalise his children.
I am glad to see present the Chancellor of the Duchy of Lancaster. I ask that when he makes the review of the social services on which he is engaged the workings of National Assistance will be part of that review. There is nothing sacred or immortal about National Assistance. We can perfectly well take another look at it. This is an opportunity which might be taken to get an expression


of opinion by the Government on the matter. I ask whether the time has come to absorb the National Assistance Board in the Ministry of Pensions and National Insurance.

Mr. Speaker: Order. This is interesting, but I find some difficulty in relating it to matters which arise upon this Order.

Mr. Curran: I appreciate that I cannot go very far in pursuing this matter. I should like, nevertheless, Mr. Speaker, without travelling outside the range of the debate, to ask if we can re-examine the structure of National Assistance. We are now making certain changes in it. I wish to ask whether in making those changes we can get an idea of the Government's thinking about the future of the whole structure and whether we are to maintain indefinitely this particular method of helping those most in need or if we can do it as part of the Ministry of Pensions and National Insurance and not as a separate function.
We all know that the National Assistance Board is the creature of the Minister. In theory it is a separate body, but in fact it is not. I do not imagine for a moment that the right hon. Lady first reads in her morning paper that the National Assistance Board has decided to increase scales and says, "I wonder what they will do next". Of course she is well aware of what the Board is doing. I wonder if it is not now time to merge the Board into the workings of Pensions and National Insurance. Also—this is not a small point—I wonder if we could get rid of the name.

Mr. Speaker: Order. I really must make the point because the Minister would be in trouble if she sought to reply to the hon. Member's questions. All that this Order does is to increase certain amounts. We cannot change names or amalgamate systems under it.

Mr. Curran: I appreciate, Mr. Speaker, that we are concerned with an administrative change. I wish to suggest, although I do not want to go outside the rules of order, that we should seek to get the Government's thinking about the future of National Assistance. I hope that when the right hon. Lady replies to the debate she will give us an

idea of whether she proposes to maintain the Board as a nominally autonomous body. If she cannot, I wonder whether the Chancellor of the Duchy can say whether some change in the name is envisaged.

9.39 p.m.

Mrs. Margaret Thatcher: This will probably turn out to be a short debate. On other occasions we have had quite lengthy debates on a Friday when different sets of rules of order, with respect, Mr. Speaker, seemed to prevail, and we have had very wide-ranging debate on National Assistance. However, this is not a Friday and, therefore, we have to keep to strictly relevant matters.
We on this side welcome the increases in National Assistance. I thank the Joint Parliamentary Secretary for the details he gave about them. I shall make only one or two comments about them. I want, first, to say a few things about the disregards, which I have mentioned before and upon which the right hon. Lady might be expecting a few words from me. The disregards have been increased only once since National Assistance began; that is to say, they were increased very substantially in 1959 and the increases took effect upon the same date as the then increases in scale rates. They took effect at a time when the scale rates for a single householder had increased by 26s. over those in 1948.
Under these Regulations the scale rates for a single householder will have increased since the disregards were last increased by a further 26s. We have, therefore, reached an identical point for the consideration of disregards. The right hon. Lady might—I hope that she will—tell me that separate Regulations will be laid to increase the disregards to take effect from the same date as these scale rate increases. I shall be delighted if she does, because I think that we have reached the time that the disregards should be increased further.
The right hon. Lady and the many hon. Members who have been present at our debates in the past will know that a good deal of time was taken up during those debates on considering the problem of some people who, it has been thought, are reluctant to apply for National Assistance. Because we have been so anxious


to solve that problem, I think that sometimes we have not given sufficient consideration to a parallel problem, namely, that there are quite a number of people who would like National Assistance, but whose capital is just above the level which would permit them to apply.
During the last few weeks, particularly when I was electioneering, I came across many who wanted income help, but whose capital was just above, or in some cases a few hundred pounds above, the present £600 limit above which they are ineligible for assistance. I therefore ask the right hon. Lady to consider increasing this capital disregard and the absolute disregard of £100 of capital at this point in time.
There are other disregards which I think sometimes have a disincentive effect on people who would otherwise help themselves. One which I have come across is the present income disregard of 30s. a week for the person not required to register for work. I would hope that this, too, could be increased as it was in 1959.
A third disregard, about which I have been approached by charitable organisations, is the one of 15s. a week which operates by analogy to the superannuation and trade union disregard, whereby if a grant of more than 15s. a week is made to a person in receipt of National Assistance the extra amount comes off the National Assistance allowance. Again, this amount was increased in 1959 from 10s. 6d. to 15s.
I think that the time has come when we should urge the right hon. Lady to ask the Board to increase it, at any rate to £1, which is a nice round sum and one which many charitable organisations would be very willing to give——

Mr. James H. Hoy: Why did not the hon. Lady do it?

Mrs. Thatcher: I started, I hope very logically and reasonably, by saying that the disregards were increased when the scale rate for the single householder had gone up by 26s. It has now gone up by a further 26s., and I base my argument on that.
We put up the disregards, and when they are increased they usually go up by a considerable amount. Generally,

they went up in 1959 by 50 per cent. all round; the capital disregards were increased from £400 to £600 the income disregards went up from £1 to £1 10s. Generally, the disregards go up less often than the scale rates, but when they do they are increased by a considerable percentage. The time has come when they should be increased again by a considerable percentage amount. I hope that the right hon. Lady will consider laying draft Regulations which will take effect on the same day as the increases in scale rates come into operation.
The wage-stop is far easier to debate than to solve as a problem. We have debated it in the House on many occasions, and in listening to the debate today I found myself reaching for the arguments with which to defend the wage-stop because I had to do that from the Dispatch Box opposite on a number of occasions. This came up as recently as the last Question Time devoted to the Ministry of Pensions before the General Election, when, as usual, I was under fire. The right hon. Lady now the Minister defended the principle of the wage-stop. Her right hon. Friend the present Minister of Overseas Development, the only lady in the Cabinet, challenged the principle in a way which only she can challenge any principle; we thus have an example of what must be the only eternal triangle to consist of three women.
An hon. Member who is now in another place and who was then the "shadow" Minister of Pensions also challenged the principle and in a previous debate to which reference has been made tonight a number of other people challenged it. I have only one comment to make on this point. It relates to family allowances, to which my hon. Friend the Member for Uxbridge (Mr. Curran) has referred tonight as he did on a previous occasion.
Family allowances are certainly not taken into account for the wage-stop equation, which says that a person shall not get more when he is out of work than he receives when he is in work, but the allowances are taken into account for the purpose of calculating the resources and, therefore, they have an effect on the wage-stop provision. In other words, if family allowances were to increase all round there would be a reduction in the number of people who are


limited by the wage-stop in what they can receive from National Assistance, but it is a difficult and obscure effect and it arose because family allowances are taken into account for the purpose of resources but not actually for the work-stop equation.
This is the eleventh increase in the National Assistance scale rates since they were introduced in 1948. We on this side of the House made eight increases. In five out of the eight blind persons had a preferential rate of increase over and above the increases afforded by the ordinary scale rates. On three out of the eight occasions blind persons received the same increases as those who were on the ordinary scale rate. On this occasion the Board has followed the lesser provision. It has not given preferential increases at all to blind persons, so that a married couple of whom one or both are blind receive exactly the same increases as a married couple neither of whom is blind. There must be a reason for this. It cannot be money because there are only 53,000 blind persons receiving Assistance and, of course, there has been a tendency in recent years to give special allowances to blind persons under the tax system. It is possible that the reason is that the preferential scale rates also apply to tuberculous persons, and it may be thought anachronistic these days to select that particular illness out of many for the giving of preferential scale rates.
One or two other points of detail. The Parliamentary Secretary mentioned people living in Part III accommodation. I wonder whether the pocket money allowance will be going up.

Mr. Pentland: Mr. Pentland indicated assent.

Mrs. Thatcher: On the last occasion, it went up from against the 1ls. 6d. to 13s. 6d., and I expected that on this occasion it would be raised again.
Am I right in thinking that the increases in respect of the children of widowed mothers given under the 1964 Act will continue to be disregarded for the purposes of this increase? We had a special provision in the 1964 Act which made certain that this was done.
The Parliamentary Secretary gave a number of figures about total expenditure on the basis of existing cases. There will be extra people who will become

eligible for National Assistance and who will greatly benefit from coming within the National Assistance system. If my calculations are correct, expenditure on National Assistance next year cannot be less than £257 million, and it may be even more.
In conclusion, I pay tribute to the excellent work of the Board and to the sympathetic and understanding way in which its officers never fail to discharge their duties.
I have great pleasure in supporting the right hon. Lady's Regulations.

9.52 p.m.

The Minister of Pensions and National Insurance (Miss Margaret Herbison): This has been a shorter debate than we usually have on provisions of this kind. I take, first, the question of the disregards which was raised by the hon. Lady the Member for Finchley (Mrs. Thatcher). The hon. Lady hoped that there would be separate Regulations introduced between now and 29th March to raise the level of the disregards. I have to tell her that there will be no separate Regulations. Had we intended to raise the figure for the various disregards, we should have done it now. The Board would have made a proposal and that proposal would have been contained in the Regulations which we are now discussing.
The hon. Lady said that only once since National Assistance began in 1948 had the disregards been changed. She is right; they were changed in 1959. She said that this was done because the National Assistance scales had gone up in total by 26s. over the 1948 figure and, if we take the present increase payable from 29th March next, they will have gone up by another 26s. from the 1959 level. One of the points which the hon. Lady should note is that, of this last 26s., 12s. 6d. is due to the increase which is to be given under these Regulations. This is an important matter to remember.
As the hon. Lady knows, the Board has discussions with the Minister on these matters. It had to take into account—and I fully agreed—that this time we wanted to make for all people on National Assistance the biggest all-round increase we could possibly manage, and 12s. 6d. for a single person and 21s. for a couple


is a very substantial increase. It seemed to us that it would be far better to give everybody on National Assistance these substantial increases instead of making a small increase available to all of them and raising the disregards at the same time.
Many of those on National Assistance can be grouped as having identical needs and they may have different amounts of total income. But that does not mean that I do not believe in disregards. I believe, on the contrary, that they have their part to play in these matters. But one must balance, as the Board had to balance on this occasion, and as it will have to balance on each occasion, what is the best way of doing justice to all those for whom the Board is responsible, and I am certain that the vast majority of hon. Members and the country outside would consider, with the Board and me, that this is the best way of doing it this time.
There has been criticism from some sources about disregards. That is why it is important that I should make it clear that I believe in these disregards. It is a matter on which the Board, in consultation with the Minister, will have further discussions to see what should be the future of disregards—where perhaps they should be increased, if they ought to be and so on. I give the hon. Lady the Member for Finchley my assurance that we shall have discussions on these matters.

Dame Irene Ward: Am I right in assuming, from what the right hon. Lady says about the Board's proposals for disregards, that no discussions took place? Is it the case that she did not ask the Board whether it had any proposals and that the Board did not itself raise the question with her—that, in fact, it put these proposals forward without discussion and that she accepted in total what the Board recommended?

Miss Herbison: No. I am sorry, but I do not think that the hon. Lady has been listening. I said, in reply to the hon. Member for Finchley, that we had discussions not only about disregards, but on all matters for which the Board is responsible.
I want to deal with the question of the wage-stop. This presents very grave difficulties to any Minister. The latest figure, for September, 1964, shows that

13,000 people are affected. My hon. Friend the Member for Bolton, West (Mr. Oakes) asked about prosecutions. There were 96 in 1963 of the type he referred to. I have raised this matter on a number of occasions in the past. The hon. Member for Finchley made it clear that I had, not opposed the principle when the question was last raised under the late Government. She also knows that it is a matter to which I gave a great deal of thought when I was on the benches opposite.
The fact is that the 13,000 families—it is not only 13,000 individuals who are concerned—are living below what is considered at present to be subsistence level. This is a very serious matter. It is a problem to which I have not yet found an acceptable solution in the short time that I have been Minister. In this instance, however, the Board will examine all cases, because it might be found that with the increase in National Insurance benefit, someone will get a cut in National Assistance supplement because of the wage-stop. The Board is to examine each case individually to make sure that the figures taken as normal earnings are up to date.
I can give the House an example which was taken up by my hon. Friend the Member for Motherwell (Mr. Lawson). I can tell hon. Members that the further north one goes, the more people will be found to be affected by the wage-stop. In the north of England and in Scotland wages are lower than they are in the prosperous Midlands and the South. As a result of my hon. Friend's having taken up an individual case, it was examined and the Ministry of Labour office in the area was consulted. It was found that the normal earnings figure which the Board have operated for the area was too low, so that not only did the individual concerned suffer a wage-stop, but suffered it at a figure lower than it should have been.
I can assure the hon. Member for Uxbridge (Mr. Curran) and my hon. Friend the Member for Bolton, West and other hon. Members that the Board will examine these cases to ensure that the normal earnings figure is up to date. I know from individual cases with which I have dealt as a constituency Member that in this matter the Board is as humane as it can be.
We have to give a great deal more thought not only to the operation of the wage-stop, but to what is happening to the low wage earner and his family. We often talk about the proverty and difficulties of retired people, who do suffer proverty and difficulties, but all the information I am getting suggests that the worst type of hardship and poverty seems—and I do not put it any higher than "seems"—to exist where there is a low wage earner with a fairly big family.
If a wage-stop has to operate, one way in which help could be given in this respect would be to make better provision for family allowances. I can assure hon. Members that this is a matter to which we are giving attention, but it is not a problem to which we can find a solution within a week or two. It must be considered along with all the repercussions which flow from changes in such things. We have to find a solution which will help not only when the wage-stop strikes, but which will help the low wage earner and his family, or we shall be doing less than justice to the children of a big family.

Mr. Dempsey: Will my right hon. Friend bear in mind that certain employers are deliberately paying scandalously low rates of wages, as a result of which men on standard benefit with supplementation from the National Assistance Board are better off than when working? Would she also bear in mind the fact that the Board operates a regulation by which, if a person is employed for six consecutive days, he cannot have his meagre income supplemented to the Board scale.

Miss Herbison: I will deal with my hon. Friend's last point first. Anyone who is working cannot receive National Assistance. Secondly, when scandalously low wages are paid, people are better off on National Assistance. That is the point made by my hon. Friend the Member for Bolton, West and the hon. Member for Uxbridge. The wage-stop ensures that does not happen. If there are employers who are paying scandalously low wages, that is a matter for the trade unions concerned and for the T.U.C. As a back bencher, I brought the workings of the wage-stop to the notice of the T.U.C. So much of this

comes back to the very low wages paid in some parts of the country.

Mr. Curran: I appreciate the right hon. Lady's courtesy in giving way. I am glad that she has put her finger on the nub of the matter. We are here dealing with poverty and the situation of the man with low earning power and a large family. I am asking the right hon. Lady—I hope that she will develop the point—whether, instead of prosecuting such a man, we should, until we have found a solution for this problem, which is not easy, treat him with compassion rather than take him to court.

Miss Herbison: I hope that there would be as much compassion as possible in these matters. As I say, because I have not had time to go into the matter sufficiently fully, I cannot give any guarantee tonight that the wage-stop will not continue to operate. I tried to show that the Board is doing its best to ensure that when these increases come into force the normal earnings are ascertained so that people are not penalised too heavily, and I went on to suggest that the crux of the problem was family allowances. These are all matters to which we are giving most serious consideration.
The hon. Member for Uxbridge wanted to develop the matter further than the Regulations would allow. I am sure that he already knows that we made it clear before the election that we wanted a Ministry of Social Security. When the income guarantee is working, we hope that that will take a very great number of people out of National Assistance. It will be at that stage that we shall consider what the future of the Board should be.
I want to add my thanks to the National Assistance Board, not only to its members who do very fine work and who are continually thinking how best they can help the people who need help, as I found when I became a Minister, but to its officers who work in the local offices throughout the country. This is not new for me. As a back bencher, time and again. I paid tribute to the work that the officers did. It is said, and with justice, that there are people who just will not apply for National Assistance, no matter how poor they may be. That is why we gave consideration to the income guarantee. But we do not want that to be any reflection either on


the Board or on its officers, who are doing very fine work.
I am happy to be the Minister who is introducing these substantial increases, the biggest ever to be given since the inception of National Assistance. I am very glad, also, that when our retirement pensioners, at the end of March, get their increase on their pension book, they will not at the same time find that they have a cut in their National Assistance. That is a matter that has caused concern for a very long time to hon. Members on this side. Sometimes the neediest of our old people got the smallest real increase of all the old people. By making this increase exactly the same—because it is not only a matter of synchronising the increases—as the increase which we are giving in the pension, we are ensuring that the neediest of our old people will get the full benefit from these increases.
This is the first time, too, that we have given the £4 lump sum, whether one calls it a Christmas bonus or anything else. The old people have already got it. In this difficult time—and I have had some little difficulties over the past few weeks

—it has been a source of great comfort to me to get letters about this from old people. It has sometimes almost made me feel like crying when I have opened these letters, written evidently by a very old man or woman, saying what pleasure that they have had in opening their envelope and finding an order for £4 extra. That will be a real help and, I hope, a real comfort to those 1,300,000 old people and to a further 200,000 others including the chronic sick.
I hope that with the combination of the £4 lump sum and the substantial increases, we really will have made a move towards ensuring that the old people, many of whom, because of low wages in the past, because of the difficulties of the 1930s and because these are the people who never had a chance to provide for their own retirement, will now begin to share the increased prosperity of the country.

Question put and agreed to.

Resolved,

That the National Assistance (Determination of Need) Amendment Regulations 1964, a draft of which was laid before this House on 2nd December, be approved.

DENTAL TREATMENT (MR. A. SMITH)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lawson.]

10.13 p m.

Commander Anthony Courtney: I am grateful for the opportunity this evening of raising a matter which concerns the personal health and dental fitness of one of my constituents, Mr. Smith, and to draw attention to certain shortcomings in the dental part of the National Health Service which, I believe, as a result of Mr. Smith's experience, should be inquired into.
We are all proud of our National Health Service. On both sides of the House, we take credit for the steady development over the years of a service which is, perhaps, incomparable in the world today. In that I include the dental section of the National Health Service.
In passing, perhaps I might mention the high reputation enjoyed by the school dental service by its effect, demonstrable on all sides, on our children and by the tremendous work which continues to be done in that field.
With a reputation as high as it is throughout the world, it is all the more necessary that when an individual finds shortcomings in this Service he should declare them, and, if so minded, take his protests to a high level and have them answered. I find it a little distressing that my constituent, injured as I believe he has been in his dental fitness, should find it necessary eventually, in default of any other redress, to come to his Member of Parliament, which of course is why I am privileged to raise the matter on the Adjournment tonight.
Perhaps I could go into the sequence of events regarding Mr. Smith's case, because it is germane to my case. In October, 1963, Mr. Smith, in accordance with the custom of us all, went to his local dental practitioner, a Mr. Karl Joseph, also a constituent of mine. He had a sensitive tooth, which was diagnosed by Mr. Joseph, perfectly correctly I am sure, as being subject to undue pressure. In the technical jargon, the

bite was too great, and it was therefore filed down. Mr. Smith went off reasonably happy on the understanding that he should call at the surgery again a week later.
He went back to his dental practitioner a week later to have the tooth examined as he thought, and here perhaps I should digress for a moment to describe one of the conditions to be found in Mr. Joseph's surgery. Mr. Joseph likes music, as I do and as I am sure hon. Members on both sides do. He likes music while he works, and in his surgery he has a transistor radio which puts out what I believe is colloquially described as "pop" music. In fact, it is very noisy indeed. The point is that it makes communication between this dental practitioner and his patient somewhat difficult at times.
Mr. Smith understands that Mr. Joseph muttered something about the tooth under examination—the tooth which was now giving no trouble. I have to record, because I have inspected the evidence, that Mr. Smith was subjected to the extraction of a tooth on the spot. Imagine his surprise when, on the extraction being completed, and on being invited to look at himself in the dentist's mirror, he discovered that the wrong tooth had been extracted—not the sensitive tooth which he understood was under examination, but the tooth alongside it, to use a nautical phrase. It was maintained by the dentist that this had been made necessary by the necessity for Mr. Smith to have a lower denture fitted, because it was maintained by Mr. Joseph that the lower denture which Mr. Smith possessed was loose and did not fit very well. Here a rather odd fact occurs, because Mr. Smith is not accustomed to wearing a lower denture. Before this unfortunate extraction he had a full set of lower front teeth. It was not, therefore, necessary for him to have a lower denture and, ergo, not necessary for him to have a tooth extracted in order to facilitate the fitting of that lower denture.
After this episode Mr. Smith returned to Mr. Joseph and had an upper and a lower denture fitted, Mr. Joseph having stated that the upper denture which Mr. Smith normally wears was loose. This work was done and a charge of £5 was


made to Mr. Smith for it. Mr. Joseph had considered that a complete set of new dentures was necessary and had, therefore, fitted them.
Mr. Smith very soon discovered that his new dentures, fitted, as he believed, in error—he having suffered the loss of a tooth in the process—were extremely uncomfortable. In fact, they were such a bad fit as to be totally unwearable. He appealed—as I think he should have done, and as it is absolutely right that a man in his circumstances should do—to the Middlesex Executive Council. In due course he was asked to go to Watford and report to a dental surgeon, nominated by that council, to have his dentures examined. That dentist condemned the dentures and told Mr. Smith so, and reported back to the Middlesex Executive Council.
Mr. Smith was not satisfied with this. He preferred to go back himself to the Middlesex Executive Council. He had to proceed to Marylebone, in London, where he met the eight members of the Dental Service Committee of this Council. He was confronted by eight individuals who, he maintains—and one can well understand it in the circumstances—took up a somewhat hostile attitude towards his complaint. Only three of them were qualified dental practitioners. In fact, the committee seemed to be a trifle over-weighted with lay expertise. From this meeting Mr. Smith presumably emerged bloody but unbowed.
The case went further, because meanwhile the Executive Council had decreed that the £5 paid by Mr. Smith for these dentures, themselves fitted in error and ill-fitting, was to be returned to Mr. Smith, and that that amount was to be deducted from the remuneration accorded to Mr. Joseph. Mr. Smith—Briton of Britons—was still undeterred. He considered that he had been treated badly and said that he would take the case to the Minister. In due course he wrote to the Minister of Health setting out his case admirably and in detail.
I regret to say that the Minister replied to the effect that there were two alternatives—a decision on the clinical evidence available or an oral hearing of Mr. Smith's complaints. Looking at the case, I would have thought that the Minister would have conducted an oral hearing,

although I notice that there is a deterrent to such a procedure, in that the regulations provide that the Minister has power, in the event of such a hearing taking place, to award costs against either party to the appeal. I suggest that that is a form of pressure which can operate against an individual desiring an oral hearing of this kind.
In any case the oral hearing was refused, and in a final letter on 24th November the Minister told Mr. Smith that the case was considered closed and that there would be no further appeal. I believe that the following facts in this deplorable series of happenings establish at least that in the first place Mr. Joseph was in breach of his terms of service as a dentist.
I think that it is established in the minds of reasonable men that no permission was given by Mr. Smith at any time for the work on the teeth in his lower jaw, the extraction of this tooth and the fitting of the dentures about which he complained. Secondly, it would be a bit too much of a coincidence that the extraction of a neighbouring tooth should have been anything other than unnecessary. Surely, if a tooth had needed to be extracted, it should have been the sensitive one about which Mr. Smith had been to his dentist a week previously. In the opinion of the Watford dental nominee of the Middlesex Executive Council there was thoroughly bad workmanship in the new dentures supplied to Mr. Smith.
Mr. Smith has very properly exhausted all the channels available to him in seeking to redress his wrong, ending in this Chamber. Though there was this dereliction of duty—if I may so call it—by an officer of the National Health Service, there has been no cost whatever to the Service. I believe that no remuneration other than the £5 paid for the dentures has been withdrawn from the emoluments given to Mr. Joseph. Finally, my constituent has been subjected to considerable cost in time and money in following up this grievance about his dental treatment and, in particular, he has had to pay £3 10s. to another dentist to have proper dentures fitted which he could accept.
I submit, for the Minister's consideration, that the investigation and the procedure was autocratic and cumbrous. It


has meant travelling and expense for all the parties concerned. There is no evidence anywhere in the documents which I have seen that disciplinary action of any kind has been taken against Mr. Karl Joseph. There appears to be no guarantee that other patients of Mr. Joseph will not be subjected to the same "pop" music as afflicted the ears of Mr. Smith and resulted in the original misunderstanding by which his tooth was inadvertently extracted.
I think that the thanks of the Minister and this House are due to my constituent for raising this matter and that the very least the Minister could do, particularly as the service has not suffered any charge, would be to make an ex gratia payment to Mr. Smith in consideration of the pain, discomfort and trouble which he has suffered.

10.29 p.m.

The Parliamentary Secretary to the Ministry of Health (Sir Barnett Stross): The hon. and gallant Member for Harrow, East (Commander Courtney) must have been misinformed about his constituent having all the teeth he should have had in his lower jaw. That is what the hon. and gallant Member inferred. I have here a diagram of the condition of Mr. Smith's teeth when he was examined by the dental officer, and it seems to me, if I read it rightly, that Mr. Smith had four teeth on the right side and five on the left and, therefore, could not have had all his lower teeth.
The hon. and gallant Member has put the case for his constituent firmly and clearly. He will not mind if I again go through the salient points, because there are perhaps slight differences of emphasis between us on this matter.
My history of the case is as follows. Mr. Smith wrote to the Middlesex Executive Council on 30th December, 1963, and he then complained that at a visit on 24th October, as we have heard, Mr. Joseph, the dentist, had extracted a sound tooth on the front of the lower jaw in mistake for the tooth next to it. This tooth had previously been giving the hon. and gallant Gentleman's constituent trouble. It had been painful.
As a result of this, new dentures had to be supplied, and Mr. Smith went on to complain that the new dentures were unsatisfactory. The Executive Council

then wrote to Mr. Joseph, the dentist, asking for his comments on this complaint. This is the usual form. The dentist replied saying that he had explained to Mr. Smith at an earlier visit that as his existing denture seemed no longer to be fitting properly—I presume this is the upper denture—if new dentures were to be fitted the front tooth concerned would have to come out as it was loose and that Mr. Smith agreed to this treatment.
The Executive Council then arranged for Mr. Smith to be examined by a regional dental officer of the Ministry. He reported that the dentures supplied by Mr. Joseph were unsatisfactory. He did not suggest that there was any need to extract any teeth, including the one which Mr. Smith said was unsound. The Executive Council——

Commander Courtney: Mr. Smith had complained of a sensitive tooth, but it had quietened down by the time he made his second visit and could no longer be considered as unsound.

Sir B. Stross: This, I understood, was his case. I am now giving the case as reported by the Executive Council.
The Executive Council then asked the dentist, who also received a copy of the dental officer's report, whether he was prepared to provide Mr. Smith with new dentures as recommended by the dental officer. But the dentist preferred to withdraw from the case. The hon. and gallant Gentleman knows what this means—that he would not charge for anything he had done. That is what "withdraw" means.
I should perhaps make it clear that in the course of these exchanges the Executive Council told Mr. Smith that the dentist was prepared to refund the statutory charge of £5. Moreover, Mr. Smith told the Executive Council that he was obtaining a new lower denture from another dentist. There was, therefore, no question at any time of these proceedings preventing Mr. Smith from securing necessary treatment. This is a point on which we must, I think, be agreed.
The Service Committee appointed a hearing—the hon. and gallant Gentleman has referred to it—at which both Mr. Smith and Mr. Joseph atttended. This was on 30th April. Both Mr. Smith and


Mr. Joseph gave oral evidence and Mr. Smith's teeth were again examined, this time by the dental practitioner members of the Committee. There were three of them, and, therefore, four dentists examined his teeth.
The Committee accepted Mr. Joseph's version of the events on 24th October, and although it considered that the dentures which he had supplied were unsatisfactory, it dismissed the case in view of the fact that Mr. Joseph was unwilling to continue treatment; it made the condition that the amount of the fee for the dentures should be withheld from Mr. Joseph's remuneration and that the £5 statutory charge should be repaid to Mr. Smith.
Mr. Smith appealed to the Minister of the day, and his appeal was allowed so far as it related to the dentures. This was on the ground that the dentist's withdrawal should not have been allowed to prejudice the complaint. The practical result, however, was the same—the amount of the fee was withheld from Mr. Joseph's remuneration and £5 was paid to Mr. Smith. The Minister felt obliged to dismiss Mr. Smith's appeal in so far as it related to his complaint that unnecessary work had been done because of the extraction of the wrong tooth. This is an important point to which I must now refer.
The hon. and gallant Member has complained that the handling of the case was characterised by, let us say, excessive bureaucracy and some muddle, perhaps, which involved time, expense and so on. In so far as this is not a reflection of Mr. Smith's dissatisfaction with the result expressing itself as a criticism of the procedure, I presume it arises from the considerable correspondence which has been entailed and the slow pace of events. Mr. Smith, admittedly, had to write many letters—we admit this—but the procedures require that both parties should, before the matter reaches the Service Committee, be entitled to state their own case and to comment on that put forward by the other party. The same procedure applies broadly on any appeal to the Minister from the decision of the Service Committee and Executive Council. This may take a certain amount of time—it does—but I am sure that the hon. and gallant Gentleman would agree with me that, regulations apart, no other method

of proceeding would accord with the requirements of natural justice. Both sides have to know what the other has said.
The family practitioner services which are provided under Part IV of the National Health Service Act, 1946, differ from the hospital and local authority services in that those providing the services are not employed by the authorities concerned. This is a great difference. These people work under contract with the Executive Councils to provide services as independent practitioners. It follows from this that there can be no question of Executive Councils exercising a discipline as an employer to deal with any shortcomings in the service. The fact that dentists are independent contractors is fundamental to an understanding of the purpose of Service Committees, and I turn to this for a moment now.
The Service Committee procedure provides a means of investigating possible failures of practitioners to observe their terms of service under their contracts, and where breaches are found it provides for a withholding of remuneration to compensate for the failure, or, in appropriate cases, for steps to be taken to obviate future breaches, and also enables Executive Councils in certain circumstances to refund the statutory charges which patients have paid.
The procedure is not intended to provide redress for the patient. If the patient wishes—this is a point made by the hon. and gallant Gentleman—to press for damages against a practitioner, that is a matter for an ordinary civil claim in the courts, and it is wrong to ask the Ministry to offer an ex gratia payment in any case whatsoever, for it is up to the patient to take action, and he has this absolute right that no one can take away from him. I mention this only by way of explanation and to clarify what seems to be a misunderstanding on Mr. Smith's part, because he has raised the question of compensation for pain and discomfort that he suffered both in the letters setting out his appeal and in the letters that he has written after receiving the Minister's decision. As I have said, the aim of the Service Committee procedure is to arbitrate not between patient and practitioner but on the contract between the practitioner and the Executive Council as the body responsible for this part of the National Health Service.
It is with these considerations in mind that this case falls, I think, into its proper perspective. The hon. and gallant Gentleman has made clear that there were two aspects to it. There were two fairly distinct issues, first that the dentist extracted the wrong tooth, and secondly that the dentures were unsatisfactory. We have accepted that the dentures were unsatisfactory, and action was taken and Mr. Smith was vindicated, and another denture was supplied to him, and he is not financially, therefore, the loser. As to the matter of a tooth being extracted wrongfully, that has not been confirmed in our view, and it is for that reason that Mr. Smith failed in his appeal, and the Minister could not support him.
I may perhaps step outside the bounds of the case to point out that the provision of excessive and unnecessary treatment, if it were proved to have taken place, is regarded as a serious matter indeed. The staff in the Ministry and the Dental Estimates Board are especially concerned with its prevention and detection. In this case the allegation that this had happened was not, we consider, substantiated. The hon. and gallant Gentleman contended that some more serious action than withholding the amount of the fee payable for supplying the dentures should have been taken. We disagree with him, on the advice given to us.
This debate has been well worth while, and I am indebted to the hon. and gallant Gentleman for having raised the matter. Time is well spent in considering the proper functioning of the National Health Service or the rights of the individual. The hon. and gallant Gentleman prefaced his remarks by speaking in glowing terms about the National Health Service generally, and he knows that he and I are in absolute agreement about that. We hope to improve it further as time goes by. That is the aim of us all, for it is a noble Service and we hope that any complaints can always be brought to the Floor of the House.
The hon. and gallant Gentleman made the point that it was a pity that this case should have had to be brought. remember a former Minister, Aneurin Bevan, saying—it was either in Committee or on Second Reading of the original Measure—that every aching tooth has a right to cry out in pain on the Floor of the House of Commons. The hon. and gallant Gentleman has done that tonight, and, although I do not agree with him, he knows that I am glad that he has raised this issue.

Commander Courtney: I have two points to raise——

Mr. Speaker: Order. The hon. and gallant Gentleman requires the leave of the House to speak again. He may get it. I do not know.

Commander Courtney: By leave, I have two points to put to the Minister. First, I wish to correct him in one respect, although I thank him for his kind remarks. Mr. Smith was, in fact, £3 10s. out of pocket on getting the new dentures to replace the faulty ones. Secondly, is it not a fact that when the Minister allows one party to a dispute like this to withdraw from the case, it is obligatory on the other party having accepted the justice of the case?

Sir B. Stross: I believe that another tooth was filled by the second dentist. Perhaps this, in part, would explain why there was a further expense. This was separate from the extraction or fitting of the dentures. On the question of withdrawing, it is a technical term meaning that he no longer wished to defend the quality of the service given by way of the dentures. That means that he did not ask for payment for them. Since it is a technical term, I do not think that the question which the hon. and gallant Gentleman asked me really arises.

Question put and agreed to.

Adjourned accordingly at seventeen minutes to Eleven o'clock.